Thanks to the increase in revenue from “Federal Transfers” and “Other Revenue,” Treasury Secretary Eric Girard managed to increase his total revenue by $1.5 billion in the two fiscal years 2023-2024 and 2024-2025.
Combined with a 2 billion cut in the “emergency reserves” that he had foreseen in his March 2023 budget, this revenue surplus of 1.5 billion finally allows him to cover the additional expenses of 3.7 billion that will occur in these two years budget years are planned.
As a result, the state of the Legault government’s finances remains almost in good condition compared to the deficit and budget balance recorded in March last year. The deficit reached 2.4 billion (+210 million) over the two financial years. For its part, the budget balance remains at the same level after the payment of income to the Generation Fund, namely 6.98 billion (-5 million) for the two financial years.
In this period of economic downturn, the financier of the Legault government has achieved a real achievement by not giving us a deterioration in public finances.
Note that I find him quite optimistic given the circumstances. In his economic outlook, Minister Girard forecasts Quebec’s real GDP growth of 0.6% in 2023 and 0.7% in 2024. That’s significantly higher than most economists in the industry are forecasting. Private. Example: Desjardins economists expect growth of just under 0.3% in 2023 and 0% in 2024.
And, importantly, the minister has not improved his forecasts on salary offers for civil servants in any way. According to him, the total supply for the five years from April 2023 to March 2028 is around 14.8%. If, after the Common Front strikes, the government of François Legault decides to be more “generous” towards its employees in the public and parastatal sectors, the financier Girard will have to revise his deficits upwards.
SMALL GIFTS
As expected, the Legault government has limited new spending as much as possible.
He contented himself with providing impetus in the fight against homelessness and food aid. We are talking about a tiny sum of $65 million for the two fiscal years 2023-2024 and 2024-2025.
At this intense time of housing crisis, new financial support provided to increase access to housing for the least well-off households is capped at $234 million over two years. Not much will be solved in this area.
As expected, Minister Girard used his budget update to announce the new parameters for indexing the income tax system and social assistance programs.
With the indexation rate of 5.08% from next January, the minister expects to give us a tax gift of around 2.45 billion for the period January 2024 to March 2025.
Specifically, this indexation results in 2024:
- Maximum family allowance of $141 per child
- $59 solidarity tax credit
- $403 as a tax credit for child care costs
- $189 for general employment bonus
- $444 in welfare for a single person
- $684 in welfare for a couple
- An increase of $948 per single person eligible for the basic income program.
And with regard to income tax, the thresholds for the three taxable income brackets are indexed to 5.08%. This will allow taxpayers to absorb the income increases associated with inflation.
SURPRISING INCOME
Compared to its budget forecasts from March last year, the Legault government will receive 1.85 billion more from the Trudeau government for the two fiscal years 2023-2024 and 2024-2025.
And the other big budget surprise concerns “other income”: the government will collect another 2.1 billion for the same two fiscal years.
The category of other income includes all income from organizations in the field of health and education, the drug insurance fund, interest, fines, the generation fund, the sale of goods and services, the income agency, investments, etc.
