The provincial government says the spending is necessary to counter rising unemployment and declining output
For the first time in a decade, the Quebec government will lurch back into the red. Yesterday’s budget projects a deficit of $3.9 billion for 2009-10 and the province’s finance minister, Monique Jérome-Forget, predicts Quebec won’t return to balanced budgets for five years. The Liberal government says the $15 billion it has committed to stimulus spending–only $242 million of which is new, according to the Parti Québécois–is necessary to mitigate the effects of a 1.2 per cent drop in economic output and an unemployment rate that’s expected to reach 8.9 per cent by the end of the year. In order to climb out of deficit, Quebec plans to hike its sales tax by one per cent beginning in 2011 and increase user fees on most government services.