Quebec’s Economic and Financial Update: Targeted Measures to Address the Priorities of Quebecers

Quebec’s Economic and Financial Update: Targeted Measures to Address the Priorities of Quebecers

On November 7, Quebec’s Finance Minister, Eric Girard, detailed plans for economic revitalization that bear significant relevance to the diverse borough of Park-Extension in Montreal. The update brought forth by Girard unveiled a commitment to additional funding worth $4.3 billion over the next five years, addressing critical concerns shared by Park-Extension residents. This financial initiative aims to improve living conditions and opportunities within the borough through various targeted measures.

A substantial portion of the investment is set to bolster housing access—an acute issue in Park-Extension, where many face housing insecurity and high rental costs.

Key Investments Announced

A significant aspect of the update is the introduction of a $2 billion annual indexation starting January 1, 2024, for personal tax systems and social assistance benefits. Taxpayers will see a 5.08% increase in various deductions, tax credits, and individual fiscal aids, surpassing the anticipated inflation rate for the period. This measure translates to an average of $282 per taxpayer for 2024.

For better housing accessibility amid scarcity, $1.8 billion will be channeled into constructing 8,000 new social and affordable housing units to assist low-income households. This includes the creation of 7,500 housing through the Affordable Housing Program and partnerships with tax-aided funds, plus 500 units designated for the homeless.

To tackle the rising concern of homelessness, the government pledges $145 million over five years to boost emergency aid, support culturally safe services for Indigenous people facing homelessness, and promote social reintegration to prevent homelessness.

Additionally, $329 million is earmarked to counter labor shortages by supporting training in prioritized sectors. The funding is poised to enhance the construction workforce and attract more workers into the public health and social services sector by backing expedited training programs for caregiving staff.

In climate action, $961 million is allocated to support climate transition and community initiatives over five years, with investments to adapt to climate change and mitigate wildfire risks, bolstering communities and the forestry sector affected by the fires of summer 2023.

Business investments will see a boost with $995 million over five years, reflecting government action to close the wealth gap with Ontario, which has narrowed significantly from 16.1% to 13.5% between 2018 and 2022.

Economic Growth and Fiscal Balance

Despite the economic downturn, Quebec maintains its commitment to a balanced budget by 2027-2028. The financial framework anticipates a $1 billion annual impact from targeted measures, using a portion of the contingency provision to meet set objectives. Thus, the deficit is capped at $4 billion for 2023-2024 with gradual reductions until balance is achieved.

The debt burden reduction goal is steadfast, with a net debt-to-GDP ratio expected to fall to 37.9% by March 2024, below pre-pandemic levels, aiming for a 30% ratio by 2037-2038.

Minister Girard asserts that prudent public finance management allows for targeted action addressing Quebecer priorities and enhancing Quebec’s economic potential while achieving fiscal balance and reducing debt load.