The CAQ inherited exceptional financial health

In a federation, each order of government is sovereign and autonomous in its competences. In our system, Quebec has never been subordinate to the federal government. On the contrary, we are equals in our respective spheres.

To appreciate the weight of the responsibilities of the two orders of government, excluding their own transfer programs, as of March 31, 2019, the operating costs of the Quebec government, including employee salaries, represented more than 70% of its budgetary expenditures. As for the federal government, operating costs, salaries of which represented 35% of the budget …

The federal government enjoys unlimited power to tax to which is added its constitutional corollary of the “spending power”, often used to intervene in areas of provincial jurisdiction.

He has used it extensively to set up joint programs such as health, with the commitment to fund costs at 50%, and then shirk his responsibilities. From 50% when the program was launched, in 2019 we were at 23.5% federal funding!

When our government was elected in 2003, we made a commitment to reduce the tax burden on Quebecers.

Moreover, the federal government refused to recognize a fiscal imbalance between our means and our respective responsibilities. Although it put us in a dead end, we refused to run a deficit or cut services. We have made the choice to impose on ourselves one of the most rigorous expenditure control regimes in Canada and to protect services.

Recognition of asymmetric federalism

In 2004, we obtained an agreement on health which provided for increases in federal transfers of 6% per year, in full respect of Quebec jurisdiction. At the same time, we obtained for the first time a formal recognition of the principle of asymmetric federalism.

In 2007-2008, with the recognition of the fiscal imbalance by the Conservative government of Mr. Harper, Quebec received a correction of $ 2.3 billion which included transfers already planned from the Liberal government of Paul Martin.

This finally allowed us to regain the leeway to reduce the tax burden of Quebecers with direct effects on their disposable income and on economic growth. We have helped all taxpayers and especially middle and low income families. For a couple with two children and a modest income of $ 40,000, this represented a drop of 16 to 17%. With two children and two incomes totaling $ 75,000, the decrease was 7.8%.

It has always seemed strange to us to repeatedly read the lamentations of Mr. Harper, who was offended to see our government reduce the tax burden on Quebecers.

This is all the more bizarre since our government was, from a fiscal and economic point of view, responsibly conservative.

Even though the Harper government was, for its part, more of a right-wing populist government, it is as if one Conservative was criticizing another Conservative for being Conservative, which is unusual, to put it mildly, to say the least.

Except that history will have proved us right:

– in 2007-2008, the year in which we reduced taxes for Quebecers, nine out of ten provinces also reduced taxes, including the five that also received equalization;

– contrary to what is conveyed, two-thirds of the federal transfer went directly to health and education services and a third went in tax cuts to ensure our competitiveness, to increase our prosperity and to maintain a fair tax environment ;

– the credit rating houses (for example JCR) recognized that our reduction in taxes had been a determining factor that enabled Quebec to weather the financial and economic crisis of 2008-2009 better than Canada as a whole and the States – United.

It took 15 years of Liberal government with efforts, fiscal discipline and promising choices (particularly in personal taxation, the establishment of the work premium, the abolition of the tax on capital, investments in infrastructure) to establish exceptional financial health for the Quebec government and solid foundations for our economy.

Today, Quebec’s credit rating is higher than Ontario’s! The Generations Fund is maintained and, when it took office, the CAQ inherited a budget surplus of $ 8 billion (as of March 31, 2019). Dear fellow citizens, you will not see another Quebec government in your lifetime inherit a financial situation as robust as that which was bequeathed to them by the Liberals. Thank you to our friend Mr. Fortier for giving us this opportunity to remind us.

* Read the text “The imbalance of choices” by Michael Fortier

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