On Tuesday, Québec Finance Minister Eric Girard tabled the provincial budget, “An Engaged Québec,” in the National Assembly in Québec City, the first provincial budget since the election last fall. Breaking with a long-standing tradition ahead of the budget release, Minister Girard announced a $10,000 donation to a community centre in Limoilou, rather than buying a new pair of shoes.
This will be a new tradition where, instead of buying, we will give.
— Quebec Finance Minister Eric Girard
Premier Legault’s government performs a balancing act in this budget, between giving more affordability to the lowest earning Quebeckers and making investments of $24 billion over the next five years to improve health care delivery in the province and the transition to the green economy.
Economic projections
Inflation and the increase in interest rates over the past year have slowed growth in the Québec economy, growth for 2023 is expected to be 0.6 per cent, before rising to 1.4 per cent in 2024.
In 2023-24, the deficit will be $4 billion and gradually be reduced by $1 billion each year. As outlined December economic statement from Minister Girard, the province expects to balance the budget by 2027-28.
Payments to the Generations Fund will be $2.4 billion in 2023-24 and increased gradually to $2.8 billion by 2027-28.
The net debt-to-GDP ratio for the province in 2023 is 37.4 per cent, but the government predicts a slight increase in 2024 to 37.7 per cent, before beginning to decline in 2025 and reaching 35.8 per cent by 2028.
According to Girard, the province remains on track to balance the budget by 2027-28.
Social policy and affordability
As had been promised by the Coalition Avenir Québec government, the highlight of the budget is a tax cut for the two lowest income tax brackets to help address the rising cost of living and inflation, which will save up to $814 for individuals or $1,127 for couples per year. This tax reduction is expected to cost $9.9 billion in 2023-24.
To support families, the government will spend $440 million to create an additional 5,000 subsidized childcare spaces over the next year.
For the opposition parties, Québec Solidaire and the Parti Québécois, each called for the government to invest in affordable housing, public transit, long-term care and home care for Quebeckers.
Premier Legault and Finance Minister Girard balanced the demands of the opposition with more than $5 billion in new for the health care sector, including $2 billion to support long-term care and home care for seniors and other vulnerable groups.
According to the city of Montreal, 2,000 new affordable housing units are needed each year to meet current demand. Budget 2023-24 invests $1 billion to increase the supply of social and affordable housing, with $650 million earmarked to support the completion of 5,250 social housing units across the province,
The Société de transport de Montréal had asked for the province to cover the authority’s financial deficits for 2023 and 2024 as it continues to struggle with lower ridership stemming from the COVID-19 pandemic. The government responded by providing $429 million over five years to support the recovery of public transit and $722 million over six years to improve accessibility and efficiency of public transit networks.
Last week, Minister Girard also confirmed the government had decided to not raise the age of eligibility for the provincial pension plan from 60 years-old, after holding a series of public consultations.
Investment in key sectors
To encourage business innovation and stimulate private investment, the budget proposes $888 million over five years through a new tax credit holiday for major investment projects aimed at stimulating private investment, accelerate economic growth and to stimulate digitization and exports. To deal with the labour shortage, the budget also includes $615 million to help companies recruit workers and the integration of immigrants into the workforce.
In order to assist the regions of Québec, still struggling in the wake of the COVID-19 pandemic, the government will contribute $1.4 billion to support the regions of Québec through growth of the biofood sector and support for the tourism industry.
Green economy
To further encourage large-scale investment in projects in Québec, including in the battery sector, the budget provides $40 million over four years for land characterization studies, engineering and pre-project work as well as the sustainable development of industrial sites. $135.5 million has also been committed for the development of industrial land as part of the 2023-2033 Québec Infrastructure Plan.
The government will spend $9 billion over five years to continue the fight against climate change, including improvements to the 2030 Plan for a Green Economy.
For the second year in a row, the government has generated significant additional revenue from the carbon market, which will be used to enhance the 2030 plan. The 2023-2028 implementation plan for the 2030 Plan for a Green Economy will also receive an additional $1.4 billion.
Also included:
- $32 million over 3 years to support biogas production projects.
- $10 million for initiatives ensuring responsible development of critical minerals and renewing the mandate of the Société d’investissement dans la diversification de l’exploration.
- $500 million over 5 years to support the creation of the Fonds Bleu, protecting water resources and funding water management measures.
Health
To address the needs of the health care network in the province, Budget 2023-24 outlines $5.6 billion in new spending on the health system. This includes $3 billion for efficiencies and structural changes to adapt to post pandemic realities, making the health care system more accessible, efficient and flexible to the public.Including $60 million to create the Santé Québec, decentralizing the health and social services network and $146.2 million to develop the Votre Santé patient portal to facilitate appointment booking.
As well, there is $2 billion to support care for seniors and caregivers and to increase the availability of home support services, and $565 million for supporting the most vulnerable.
In June of 2022, the Québec government released its policy on rare diseases. Budget 2023-24 includes $44.1 million over five years to implement the policy and manage patients with rare and chronic diseases.
To continue to foster investment in the health and life sciences sector, the budget allocates $12 million over five years to continue financing businesses under BioMed Propulsion.
Public safety
In the wake of the tragic incident in Amqui, the provincial government is providing $220 million over six years to support public safety in Québec.
This includes:
- $50 million to combat armed violence.
- $69 million to modernize the École nationale de police du Québec.
- $100 million to improve accessibility and efficiency of the justice system to reduce delays and ensure public confidence in the justice system.
- $45.5 million for 9-1-1 network modernization.
Digital transformation
The promotion of digital transformation and the digitization of Québec companies to support their growth and export abilities are a key priority for the government. Budget 2023-24 includes initiatives totalling $201.9 million over five years to extend the Cyber Security Enhancement program and continue the digital transformation strategy. This funding will also support the Marketing and Export Support Program to help businesses find new markets for their products and increasing the productivity of the construction industry.
This includes:
- $100 million over 5 years to continue creating innovation zones, as seen with quantum computing in Sherbrooke and Technum Québec in Bromont.
- $108.7 million to improve internet connectivity and cellular coverage
- $46 million over four years 2027-28 to enhance culture of innovation and research in universities.
- $15.4 million additional investment in the Montreal Fintech Station, supporting 15 to 20 startup companies.
Transportation
Investments in transportation are seen with infrastructure projects, such as the Port of Montreal expansion Contrecoeur Port Terminal with $75 million over five years to support the construction and expansion.
This includes:
- $55 million over three years to support innovation in the transportation sector, particularly research and development partnerships and technology showcases.
- $200 million to maintain and improve road networks.
