With economic growth slowing dramatically, Quebec intends to take a targeted approach to pressing social issues like food insecurity and the housing crisis, Finance Minister Eric Girard announced in an economic update Tuesday.
The Finance Ministry is projecting a deficit of $4 billion for the 2023-24 financial year, with a gradual return to a balanced budget by 2027-2028.
“The situation is extremely difficult for Quebecers,” Girard said. “We are not in a recession but we are certainly in a difficult period that can be described as stagnation.”
While the Coalition Avenir Québec (CAQ) government will not be sending cheques to Quebec households, as it did in the past to help with inflation, the mini-budget does contain some tax breaks.
In order to increase investment in some programs, the government will be tapping money that normally would have gone into its contingency funds, to the tune of $1 billion a year.
Most of the spending is aimed at three areas.
Housing and homelessness
Quebec will spend $1.8 billion (half of which is federal funding) over six years to build 8,000 social and affordable housing units.
Of that sum, $1.6 billion will be used for building 7,500 housing units for low-and-moderate-income households and $225.2 million will be used to build 500 housing units reserved for homeless people, under the Quebec affordable housing program.
Quebec has earmarked $338.2 million over five years to tackle homelessness.
Additionally, $123.7 million has been earmarked for emergency assistance related to homelessness as well as for offering culturally safe services for Indigenous people experiencing homelessness.
Based on the latest count between 2018 and 2022, the number of people who were visibly homeless jumped to 44 per cent from just under 6,000 to about 10,000.
While Parti Québécois Leader Paul St-Pierre Plamondon welcome some of the measures, particularly those for food banks, he says the CAQ government has “long kept its head in the sand” when it comes to the housing crisis, and criticized the absence of a plan to help first-time homebuyers.
“A whole generation will not have access to property because it’s completely unaffordable in proportion to their salaries,” St-Pierre Plamondon said.
Québec Solidaire critic Christine Labrie said Quebec needs 10,000 social housing units in two years.
“A crisis requires an urgent response and obviously, the CAQ is in no hurry to use the $1.8 billion … to help people find housing.”
With food banks pleading for help given a growing clientele, Quebec will provide five food organizations with a one-time targeted injection of $20.8 million to help. The funding will be distributed to:
- $10 million for the Food Banks of Quebec network.
- $5 million for the Breakfast Club of Canada.
- $2 million for the Tablée des chefs.
- $2 million for the Fondation Olo.
- $1.8 million for La Cantine pour tous.
Adapting to climate change
The government will spend $961 million over the next five years to adapt to climate change.
That includes $404 million to support communities affected by this summer’s devastating forest fires and $292 to support the forestry industry and encourage climate-change initiatives.
Economic report card
Girard says the wealth gap between Quebec and Ontario has gone from 16.1 per cent in 2018 to 13.5 per cent in 2022. The plan is to close it entirely by 2036.
With inflation continuing to take a bite out of Quebecers’ spending power, the government announced it will spend $2 billion a year indexing tax brackets and social programs such as pension benefits.
Interim Liberal Leader Marc Tanguay said the indexation announced by Girard is based on a policy adopted years ago in Quebec.
“He has nothing new under the sun to announce today,” Tanguay said. “He’s keeping his rose-coloured glasses on.”
Quebec’s projected economic growth in 2023 is 0.6 per cent. Economic activity is also expected to be lower than the originally forecast 1.4 per cent, at just 0.7 per cent.
Girard said the government’s revenues will be around $144.3 billion for the current fiscal year — around $800 million less than forecast in the spring budget. Spending will be around $147.4 billion, approximately $600 million more than forecast.
The province’s operating deficit will be just over $3 billion — up from an estimated deficit of $1.67 billion in the spring budget. That will rise to more than $6.1 billion after the government makes payments to a fund dedicated to reducing the province’s long-term debt.
Quebec’s debt-to-GDP ratio (its ability to repay debt) is projected to be 37.9 per cent as of March 31, 2024. In comparison, Ontario’s is 37.8 per cent and Alberta’s is 10.2 per cent. Girard said the goal is to reduce the ratio to 30 per cent by 2037-38.