“If there are any economists in the room, you’re no good,” Monique Jérôme-Forget told an in camera press conference on provincial budget day. “You change your minds every month.”
With that, Quebec’s finance minister apparently believed she could justify the dodgy numbers her own budget contains:
The projected deficit for the upcoming year will be about $3.9 billion. How do you get to that figure? First, take the $2.5 billion bite the government says the recession will take out of government revenues. That leaves you with $1.4 billion left to account for. Now add the $826 million in stimulus measures the government says it has included in this unique, “recessionary” budget. And, just to be generous, top it off with the $75 million the government says Ottawa cheated Quebec out of by changing the equalization formula midway. After all that, you’re still left with a $500 million hole.
The plan to dig the province out from the swamp of red ink it finds itself in is just as murky. Sure, they’ll hike the PST by 1%; that’ll good for about $1.2 billion a year. And the government will index user fees for services, meaning the relative cost of those services won’t increase with inflation (unlike the $7 a day daycare program, which won’t be indexed). Next—and this is a big assumption but let’s give Jérome-Forget the benefit of the doubt—assume the $826 million in stimulus spending that’s included in this budget is pulled from future ones and that none of the stimulus spending added fixed costs to future budgets like, say, maintenance on all those infrastructure projects. That still leaves you with a $1 billion deficit. (Hey, maybe the forestry and manufacturing sectors will make some miraculous recovery and the whole $2.5 billion in revenue that vanished because of the recession will come back. Who wouldn’t bet on that?)
If history is any indication, some form of Charest fatigue will set in over the next 24-36 months—perhaps even earlier—and the PQ will be left to deal with the economic mess. Thankfully, they’ve already got a plan that’s almost as good the Liberals’: Blame the feds.
So, the big news from yesterday: Quebec is running deficits and it’s the economists/federal government’s fault. Plus ça change…