QUEBEC CITY – Quebec Finance Minister Nicolas Marceau said on Wednesday he will not balance the books this year, blaming “very low” inflation and weak economic growth.
Marceau was tabling an economic update at the National Assembly.
Last year, he presented an austerity budget and said: “We will achieve fiscal balance in 2013-2014 and maintain it thereafter. We don’t want to postpone this because we can’t do it.”
In September, he repeated that it was a “firm commitment.”
On Wednesday however, the minister had changed his tune. He admitted to being unable to reach his goal of bringing down the deficit.
“We remain in a situation that is fragile at the world level,” Marceau said.
Under the PQ, Quebec’s deficit has climbed from $1.6 to $2.5 billion. This is despite massive cuts in daycare, university research and welfare programs. Marceau said he was able to reign in expenses, but revenues are hard to come by.
In his economic update, Marceau pointed to a rate of inflation that is stagnant. Economic growth only reached an anemic 0.9 per cent this year, 0.4 per cent lower than expected. And he said Quebecers reacted to a two point increase in the QST by spending less.
Still, the minister argued his government managed to create thousands of new jobs and increase exports by 4.5 per cent.
Opposition parties called the update devastating.
“We’re increasing the debt of Quebec by $14 billion for the next two years!” said CAQ leader François Legault. “People can understand that we’ll leave this debt to our children.”
The Liberals argued the Premier and her Finance Minister are wearing rose-tinted glasses. Since August, they have made 276 announcements totaling $10 billion.
“I’m not sure how they’re credible,” said Liberal leader Philippe Couillard. “They have to review all the announcements that have been done in the last two or three months that were clearly designed to be in a pre-electoral mode.”
The projected deficit for next year is $1.75 billion. Marceau said he’s banking on healthier growth and an increase in consumer spending to erase the deficit completely by 2015-2016. Opposition parties are more than skeptical; they said they’re likely to vote against the next Marceau budget and defeat the government.
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