While inflation remains at painful levels, François Legault wonders what to do.
Posted at 5:00 am
Last week, he opened the door to send money back to Quebecers. Time is running out for him to do so without falling into electoral obscenity.
It will take several weeks between the announcement of the proposal and the receipt of the money. A check received in mid-summer will give the impression that it was signed by the head of the CAQ, and not by the Prime Minister. With the party logo in lieu of the Quebec flag.
In the final budget, Finance Minister Eric Girard proposed that taxes could be lowered. Mr. Legault confirmed last week that it was being seriously considered.
This option will also have drawbacks.
First, if the goal responds to temporary inflation, the proposal provides an immense net.
Caquists will argue that the proposal would be relevant even without inflation and that they have permission to do so. In 2023-24, costs are expected to equal revenues. The remaining deficit will come from payments to the Generations Fund, which finances debt repayment. In addition, in a very short period of time, inflation is felt more in government revenue than in government spending – the deficit forecast for 2021-2022 was revised downwards last week.
However, Quebec is not immune to a recession. And in the long run, it won’t escape the demographic shock that will cause increased health care spending.
The other downside is strategic risk. Quebec is calling for increased health transfers. It would be ironic for Mr. Legault to explain to Ottawa that he was short of money, while reducing his own income by cutting taxes.
Last fall, the Legault government announced a $ 200 to $ 270 check for low -income people. Nearly 3.3 million Quebecers received it.
In its most recent budget, it was more generous and less targeted, with $ 500 revenue for anyone reporting net income of less than $ 100,000. That is 94% of the population. However, not everyone needs help. During the pandemic, the savings rate nearly tripled, and at the beginning of 2022, average hourly wages rose faster than inflation.
As summer approaches, caquistes are hesitant between the targeted 2021 strategy and the luxury of the latest budget.
One thing is certain, voters are open to proposals … The increase in gas and grocery prices is painful. And core inflation (excluding energy and food) is also accelerating.
The pandemic also provided a good argument to those who wanted the state to help the poorest.
From 2019 to 2020, the poverty rate in Quebec almost stopped (from 8.9% to 4.8%). We became the province with the fewest poor people in the country, ahead of Alberta1. The programs have really helped people who don’t need it. But this is an argument for better targeting them, and not for deleting them.
When the CAQ was created, it was predicted that politics would cease to be based on the independence-federalist axis. A new split will appear between left and right.
It doesn’t seem so much now.
The Ontario election campaign gives a taste of what awaits us in September. The parties are in danger of clashing with very down-to-earth proposals.
Of course, health, environment and identity will also be at the heart of the debates. After all, the pandemic revealed the weakness of the health network, the dilapidated state of schools and the shortage of teachers and educators. But the confrontation will also revolve around the portfolio of voters.
Promises have piled up. Here is a very brief overview.
Québec solidaire wants to double the solidarity tax credit and increase the credit by $ 500 for those aged 65 and over.
The Parti Québécois will create a “purchasing power allowance” – a refundable tax credit of up to $ 1,000 – and suspend contributions to the Régie des rentes.
The Liberal Party wants to eliminate QST on essential products and create an allowance for seniors.
Other promises will come with ill effects.
PQ wants to limit the price of fuel, which will not help the poor without vehicles, while encouraging gas consumption when the goal is to reduce it.
Solidaires want to freeze electricity bills, a waste incentive that favors owners of large houses.
And Liberals want to remove property transfer taxes (the “welcome tax”) for first-time buyers, which will exacerbate real estate overheating.
Late in the polls, opposition parties will want to grab attention with simple, popular ideas. And in their defense, when they present a detailed and dense plan on complex topics, as the PQ did on home care, the population yawns. Strict doesn’t always pay off …
For the caquists, another danger awaits them. May their advance put an end to the killing of the remaining shame on them, and may the government give a gift to the voters instead of helping those in real need.
But at the moment, a rumor is yielding targeted assistance, possibly intended for taxi or truck drivers, who are suffering at the price bomb. If this announcement is confirmed, it will be a sign that the electoral caravans are ready to be on the road again.