After tabling his fifth budget at the National Assembly last March, Carlos Leitão, Minister of Finance, visited the Chamber to present Quebec’s Economic Plan before an audience of Montréal business people.
Here is what you should take away from his speech:
1. A positive economic situation
To start, the Minister of Finance demonstrated that the government now has full control over public finances, pointing to the submission of the fourth successive balanced budget, the maintenance of a stable financial framework and the beginning of debt repayment. Over the next few years, the government also plans to accumulate budgetary surplus.
Carlos Leitão acknowledged the work of his predecessors, who established a plan to balance the budget and created the Generations Fund, an important debt management tool that is the only of its kind in North America. In the eyes of the financial markets, this tool gives the government credibility that allows it to obtain the funds necessary for investments.
Thanks to healthy public finance management, rating agencies are giving Quebec better credit ratings. This is excellent for getting access to funds and good interest rates.
The minister specified that the improvement of Quebec’s financial and economic situation in the past few years is the main factor that has allowed the government to increase spending in its new budget. In 2017, Quebec’s economy saw its strongest growth in 20 years with a 3% increase in the GDP. The unemployment rate is at a historic low and more than 220,000 jobs were created over the past four years.
"Quebec has become a driver for economic growth in Canada."
According to Leitão, one of the key ingredients to Quebec’s current growth is confidence. We are now in a virtuous cycle stimulated by confidence from consumers and businesses. This strong situation encourages household consumption, investments and the growth of the government’s tax revenue.
2. Three focal points of the 2018-2019 Economic Plan
The recent budget includes three big measures to improve the quality of life of citizens: education, health and sustainable mobility.
Health and education: two of the government’s priorities
According to Minister Leitão, more than two thirds of the margins the government freed up over the past few years were reinvested in health and education.
Since 2014 the government has added $2.4 billion in education financing to increase the total to $18.9 billion for 2018-2019. The March 2018 Economic Plan confirms that we have reached the objective of maintaining the growth of education spending at 3.5% per year for the foreseeable future.
The March 2018 budget has allocated more than $16 billion to school infrastructure—maintenance, catching up on maintenance and replacing assets—to encourage young people to pursue a promising future.
Sustainable mobility is the third focal point of the recent budget’s Economic Plan. According to Minister Leitão, the budget’s sustainable mobility measures will give families more quality time together. Investments in public transport will allow families to reduce time spent in traffic. The budget also provides amounts for electrifying transportation and extending the blue line and Highway 19.
Moreover, the metropolitan region is an important part of the new 10-year infrastructure plan. Nearly $30 billion will be devoted to Montréal for public transport infrastructure and also for the development of large public infrastructure projects.
3. Increasing the investments in culture
In his speech, Minister Leitão highlighted the government’s commitment to the culture industry. The government accelerated public investments in culture by increasing expenditure in this area by 11%.
"Culture is a very promising activity hub for the future."
The minister mentioned how culture contributes to Quebec’s vitality. Several of our cultural institutions are in the international spotlight and increase Quebec’s recognition around the world. He also mentioned the importance of cultural institutions in the Montréal region, where they are concentrated.
4. Immigration and the availability of labour
In closing, Minister Leitão highlighted the contribution of immigration to Quebec’s economy and the growth of its GDP. According to him, relying on immigration is essential and will contribute to lessening the demographic crisis.
Over the past few years, Quebec’s demographic growth was increased by the arrival of immigrants. Between 2006 and 2017, more than 480,000 jobs were created in Quebec. During this time, 52% of jobs generated by Quebec’s economy were occupied by people born abroad.
The Minister of Finance mentioned the government’s commitment at the start of its mandate to straighten out public finances and rekindle the economy. According to Carlos Leitão, the government has followed through on this commitment and fully demonstrated that it has a functional plan, giving Quebecers the benefit of better living conditions.
"We want Quebec to create more wealth and share it accordingly. We want to keep building a stronger, more united and more prosperous Quebec."
Source: Le budget 2018-2019 s'appuie sur la santé économique du Québec et renforce l'économie de la métropole