Francis Vachon Archives The Canadian Press Quebec Finance Minister, Eric Girard
A week after agreeing with cities and municipalities on a new fiscal pact, François Legault's government is devoting a good part of its economic update to meeting their needs. It will invest $2.5 billion more over five years in housing, homelessness and the fight against climate change. Overview of the key measures in the document tabled Tuesday by the Minister of Finance, Eric Girard.
As planned, Quebec matches Ottawa's bet by investing $900 million in housing. Of the sums of 1.8 billion that will be spent over the next five years, 1.5 billion will be used to build 7,500 “social and affordable” housing units under the Quebec Affordable Housing Program. Some $200 million more will finance the creation of 500 housing units for people experiencing homelessness.
New money will also finance the addition of 4,000 units to the Rent Supplement Program.
Adaptation to climate change
Cities and municipalities, for their part, will be disappointed with investments in adaptation to climate change. Even if it loosened the purse strings by investing $292 million in addition to what it had planned, Quebec only managed to meet a fifth of their needs.
In July, the The Union of Municipalities of Quebec presented a study setting its needs at two billion dollars per year. With the investments announced on Tuesday, the share of the budget allocated to adaptation amounts to less than 1.8 billion… over five years.
Indexing of the tax regime
As of January, Quebecers' tax system and social assistance benefits will be indexed to inflation — +5.08%. In a press release issued Tuesday, the Minister of Finance is delighted with a gain of “$2 billion per year for the benefit of Quebecers.”
However, no political intervention was necessary to make this adjustment. The Tax Act already stipulates that the tax system follows the consumer price index. As this increased significantly last year, financial assistance for low-income taxpayers, in addition to deductions and tax credits, is increasing.
Quebec also intervenes to react to “the worrying increase in homelessness”. In addition to responding to the requests of food banks by adding $21 million to their envelope for this year, the government is releasing $124 million to “increase emergency assistance” for homeless organizations.
New economic projections
Quebec halves its economic forecasts for 2024. Growth, estimated at 1.4% in the Quebec budget tabled last March, will only be 0 .7% next year, forecasts the Minister of Finance, Eric Girard, in his economic update.
To return to a balanced budget in 2027-2028 as promised, the Legault government sees itself forced to dip into his “contingency reserve”. For now, it projects a budget balance of -$4.0 billion in 2023-2024.