Quebec gives rosy economic update with changes to tax credits and $2B in new spending

Quebec Finance Minister Eric Girard has announced over $2 billion in new spending, despite running a historic deficit this year. The fall economic update unveiled in Quebec City targets four priority areas: forestry, housing, public safety, and public transit.

Girard credits a slightly stronger economy and government savings for the new spending measures. The economic outlook is better than expected, with GDP growth projected to be 1.2% in 2024, up from the initial forecast of 0.6%. The government is also saving $3.4 billion over five years by optimizing tax credits and re-jigging the tax system.

While Quebec is still facing an $11 billion deficit in 2024-25 due to increased healthcare costs, Girard remains optimistic about achieving a balanced budget by 2029-30. Government spending will continue to increase, but at a slower rate in the coming years, with a focus on responsible financial management.

The new spending includes $184 million for housing projects, with half coming from federal funding. There is also a $252 million boost for the forestry sector to aid in recovery from natural disasters and trade disputes. Additional funding for public safety will assist with storm recovery efforts and increase police coverage in Nunavik.

The largest investment is a $1.2 billion cash injection to Montreal and Quebec City, primarily for public transit assistance. Municipal officials have long advocated for increased spending on public transit to maintain service levels and avoid cuts.

Criticism from opposition parties varies, with some accusing the government of overspending and others claiming it’s not enough. Despite the differing opinions, Girard remains committed to balancing the budget without resorting to austerity measures. The government’s focus on increasing spending while lowering taxes and finding efficiencies has been key to its financial management strategy.

Overall, the fall economic update reflects the government’s efforts to address priority issues and stimulate economic growth in Quebec. With a cautious approach to spending and a commitment to financial responsibility, Girard is optimistic about the province’s future economic outlook.