Quebec: the return of the boom years

Quebec: the return of good years

MISE & Agrave; DAY

During the five fiscal years from 2021-22 to 2025-26, the government of Quebec will collect $ 38 billion in revenue more than what the Minister of Finance, Eric Girard, had planned in its budget last March. & nbsp;

But that will not, however, allow François Legault's financier to significantly improve the government's budgetary situation since he plans to spend a large part of this hefty surplus income.

Of the 38.4 Billion & nbsp; $ in additional revenue that Minister Girard anticipates to collect by the end of the fiscal year 2025-26, some $ 34.4 billion will be used to cover the additional expenses he intends to devote to ministerial portfolios, new COVID-19 support and stimulus measures, transfer payments, etc.

THE PANDEMIC YEAR & nbsp;

From the economic and financial update presented yesterday by Minister Eric Girard, it also emerges that the 2020-21 financial year, which was hit hard by the COVID-19 pandemic, has turned out to be significantly less catastrophic than the minister's budget forecast. & nbsp; & nbsp;

Instead of closing the previous fiscal year 2020-21 with an anticipated deficit of $ 12 billion (before transferring money to the Generations Fund), the government managed to get by with a deficit of barely 4 billion. , $ 2 billion. & Nbsp; & nbsp;

Thanks to what? Thanks to additional revenues of $ 2.2 billion and ministerial portfolio spending that is $ 5 billion lower than Minister Girard's forecast. & Nbsp; & nbsp;

MORE TAXES AND TAXES & nbsp;

The big question: where will the Legault government's treasurer get the $ 38 billion in additional revenue that he expects to collect by March 2026?

In personal income tax . Minister Eric Girard plans to dip into our pockets $ 7.2 billion more than his budget forecasts last March.

In terms of consumption taxes, this is $ 5.14 billion. more than expected which will fill the coffers of the State.

If Quebec collects more personal income tax and more consumption taxes, that suggests that the Quebec economy will post a relatively good performance.

And that is why the government also expects to collect the share of corporations of additional tax revenues of $ 7.6 billion.

In contributions for health services, rights, permits and miscellaneous income, Quebec anticipates an additional income of 2.8 billion $. & nbsp; & nbsp;

From its government corporations (Hydro-Quebec, SAQ, Loto-Quebec, etc.), the Quebec government believes it can extract additional revenues of $ 1.5 billion from them. & Nbsp;

< p> Total additional revenue so far: $ 24.2 billion. & nbsp;

Where does the remaining $ 14 billion in additional revenue come from?

THE FEDERAL'S CONTRIBUTION & nbsp;

Minister Eric Girard, like his predecessors, may complain that federal transfers do not meet the expectations of the Government of Quebec, the fact remains that he will receive by March 2026 some 14, $ 2 billion more from the federal government than it expected. & Nbsp; & nbsp;

Although Quebec alone collects nearly two-thirds of the total equalization paid by the federal government , Minister Girard wished to recall in his new economic and budgetary update that Quebec “is the beneficiary of equalization which receives the least”. per capita in the country. & nbsp; & nbsp;

This year, for example, Quebec will pocket in equalization the equivalent of $ 1,559 per capita, compared to $ 3,136 for Prince Edward Island, to $ 2,946 for New Brunswick. , $ 2410 & nbsp; for Nova Scotia and 2007 & nbsp; $ for Manitoba. & Nbsp; & nbsp;

ECONOMIC OUTLOOK & nbsp;

If the Legault government has managed to significantly increase its tax revenues, thanks to the solid economic recovery. & nbsp; & nbsp;

For the current year 2021, the Minister of Finance sees nominal GDP grow by some 10.8%, or 4.8 percentage points more than his forecast of last March. & Nbsp; & nbsp;

And for next year, he foresees an increase of 7.2%. & nbsp;

If his forecasts materialize, Quebec's GDP will reach $ 533 billion in 2020, exceeding thus for the first time in its history the milestone of 500 billion dollars. & nbsp; & nbsp;

Another strong indicator “& nbsp; encouraging & nbsp;” for Quebec government revenues: Minister Girard expects wages and salaries to climb 8.2% this year and 7.0% next year. & nbsp; & nbsp;

Whenever we say a salary increase, we automatically mean an increase in income from taxes and levies for our governments. & nbsp;

 Quebec: the return of good years

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