The salary increases granted as part of negotiations with public and parastatal employees amount to an amount of 11.6 billion US dollars over five years, or 2.5 times the amount (4.6 billion) that Finance Minister Eric Girard stated in his March 2023 budget.
Given such high expenditure, Prime Minister François Legault rightly stated that the next budget will be largely in deficit due to negotiations with the public sector.
A superficial reaction from the union leaders: they found the Prime Minister's comments completely inappropriate.
The President of the FTQ, Magali Picard, particularly described the Prime Minister's statement as “extremely clumsy”.
In his opinion, the salary increases given to state employees are “not at all” responsible for future deficits.
According to Ms. Picard and her colleagues Robert Comeau (APTS), François Enault (CSN) and Éric Gingras (CSQ), “gift vouchers” to taxpayers, tax cuts, subsidies and investments in the real cause of the Legault government's deficits are private companies.
- Listen to the economy part with Michel Girard above QUB:
Lack of gratitude
What's wrong with saying the new $11.6 billion pay raise bill will have a direct impact on the federal deficit? Mr. Legault did not say the raises were undeserved.
He was simply stating an accounting fact: Yes, this will increase the deficits projected in the 2023 budget for the coming years.
When union leaders now denounce gift cards, tax cuts, subsidies and investments in private companies, they are shooting themselves in the foot.
For what? Because the 678,000 public servants and the 455,000 beneficiaries of the Quebec government's pension plans also received the Legault government's two gift vouchers in 2022, one for $500 in the spring and another for $400 to $600 in the fall. And they also benefited from the tax cut that came into force in 2023.
That means government employees and retirees redeemed a total of about $1.2 billion in gift cards. And they are eligible for the CAQ tax cut, which is expected to save them about $1.8 billion in provincial taxes over five years.
- Listen to the economy part with Michel Girard above QUB:
COMPANY
As far as subsidies and investments in private companies are concerned, I would also call on the FTQ and the CSN to exercise some restraint.
With its solidarity fund, the FTQ has invested in 3,700 companies. And the CSN has invested a lot of money in 1,000 companies with its fund campaign.
Each year, Quebec invests around $200 million in tax credits to encourage workers to invest their RRSPs in these two employee funds. By the way, Ottawa also pays the same amount.
Among the 4,700 companies in which the FTQ fund and Fondaction have invested, many benefit from government investments.
That's why I urge union leaders to avoid a little union embarrassment when they denounce gift cards, tax cuts and corporate subsidies.