LIBERALS WORK ON IMAGE, LOOSEN PURSE STRINGS
It’s a kind of mea culpa, but don’t count on anyone in the government to admit it.
In fact, the Liberal government will argue that these last two years of austerity measures have been good for our souls, and ultimately, our pocketbooks.
Insofar as a budget can change a pockmarked image, the one presented Thursday by Finance Minister Carlos Leitão is designed to slay a few of the demons stalking the government — including that it has been coldly focused on austerity, with dire consequences for the province’s social and health safety nets — as it prepares for the next election.
Scenes of students, parents and children defiantly forming human chains around neighbourhood schools became a symbol that no government public-relations effort could counter. In a sense, those ordinary folk won.
Few would question that the Liberal regime needed a political course correction in the hopes that Quebecers can forgive and forget the painful cuts — and that is what Budget 2016-2017 is about.
But the Liberals remain touchy, really touchy, about the bumpy road that got them here.
“We are not the government of austerity,” Leitão said at a news conference before he tabled his third budget as minister in the National Assembly, in response to a reporter’s use of the dreaded “A” word.
“There has not been austerity here. What we did was slow down the rate of growth in spending.”
Leitão invited reporters to examine places where, he said, austerity is really happening — like Alberta and Newfoundland and Labrador, two provinces hard-hit by the plunge in oil prices.
Or to consider what’s happening in Ontario, where program spending growth in its February budget was limited to one per cent.
By comparison, Leitão’s announcement — that Quebec will spend 2.7 per cent more in 2016-2017 and 2.8 per cent more in 2017-2018 — appears downright generous.
Leitão does loosen up the purse strings a little, sprinkling pockets of extra change in many sectors. Education gets three per cent. Health spending gets 2.4 per cent.
They got next to nothing last year.
Leitão is still a long way from the Liberal 2014 election promise of 3.5 per cent a year in education and four per cent in health, but — combined with the break on daycare and the health services tax — Quebecers are getting some breathing room.
The difference in tone was clear from the get-go at the traditional media budget lock-up that precedes the minister’s speech in the house.
While reporters last year had to dig the embarrassing “non increases” for education and health out of the back pages of the budget, this year the government gave those areas of spending proud display in a press release.
“I hope people are here to broadcast the good news that is this budget,” Treasury Board President Sam Hamad beamed at reporters who sought comment on the arrests Thursday morning of two high-profile former Liberal politicians, Nathalie Normandeau and Marc-Yvan Côté.
What is surprising is that the government didn’t go further. It’s true most of Quebec’s spare change went to the public sector in recent negotiations, but the province nevertheless is sitting on a $2-billion surplus for 2016-2017.
It has chosen to pour all that surplus money into Quebec’s generations fund — which is devoted to reducing the debt — even though the Liberals’ election platform said that half of any surplus would go toward the debt and the other half to tax cuts.
Quebec’s 8.3 million citizens remain the highest taxed citizens in North America.
Leitão defended the decision, noting that with a total gross debt of $217 billion, interest payments alone will cost Quebec $40 billion over the next three years.
Quebec wants to reduce the debt to 45 per cent of the gross domestic product by 2026. It’s now 55 per cent of GDP.
“We won’t dip into the generations fund,” Leitão said. “For us, putting money into the generations fund is something that must continue.”
He described the Coalition Avenir Québec’s proposal to use some of the surplus to cut taxes by $500 annually for all Quebecers as a “diversion.”
Nevertheless, there is wide speculation the government will roll out politically popular tax cuts just before the 2018 election, which suggests even greater surpluses in the vault.
The trouble with that theory is that it presumes an economic recovery to generate tax revenue that has not yet materialized. Leitão’s own growth figure is a timid 1.5 per cent for 2016 and 1.6 per cent for 2017.
The province has created only 81,700 new full-time jobs since the spring of 2014.
The budget is remarkably quiet on the issue of job creation, projecting the creation of 37,000 jobs in 2015, 29,000 in 2016 and another 29,000 in 2017.
That’s a long way from the 250,000 jobs in five years the Liberals promised in the 2014 election campaign, a point the opposition Parti Québécois and Coalition Avenir Québec dwelled on at length Thursday.
“I challenge you to find talk of 250,000 jobs in that budget,” PQ finance critic Nicolas Marceau told reporters. “You won’t. It’s among the disappeared.”
“This promise stands,” Leitão insisted. “We are not far from our promise. We will continue working.”
In fact, Leitão’s message Thursday was all about optimism.
“Our fiscal house is now in order,” he said. “Every Quebecer contributed to the effort that needed to be made. Now they can benefit from sounder public finances on firmer footing.
“The budget was balanced at exactly the right time. To use one of the premier’s favourite images, our ship successfully sailed through rough seas and we are now entering calmer waters.”
And in case Thursday’s “feel better” message escapes you, Leitão returned to quoting Portuguese proverbs — as he did while tabling the 2015 budget.
“In Portugal, we often say, ‘Hold on to hope and you will always achieve success,’ ” he said. “This budget is the budget of ambition and success.”