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Quebec budget will be tabled in a context of economic uncertainty

Hours before budget is made public, the finance minister Eric Girard says a tax cut was "a commitment" from the government, not "a promise."

Quebec Finance Minister Eric Girard holds a copy of the provincial budget speech March 20, 2023. With him are Quebec Minister of Families Suzanne Roy, centre, and Dr. Gilles Julien.
Quebec Finance Minister Eric Girard holds a copy of the provincial budget speech March 20, 2023. With him are Quebec Minister of Families Suzanne Roy, centre, and Dr. Gilles Julien. Photo by Jacques Boissinot /The Canadian Press

Quebec Finance Minister Eric Girard on Tuesday will table the first budget of the Legault government’s second term, and while the document is expected to contain the tax cuts that were part of the Coalition avenir Québec’s election campaign last October, Girard seemed on Monday to be managing expectations.

“On (Tuesday), we are going to confirm all of the measures” in the budget,” Girard told reporters. “But what you are describing as a promise, I would describe as a commitment.”

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Girard then added: “If there is a moment when economic stimulus is justified, it’s when the economy is slowing.”

The CAQ has said it will reduce by one percentage point the taxation rate on the first two levels of taxation beginning in 2023.

Based on that possible reduction, a Quebecer earning $50,000 annually will pay $330 less in provincial taxes, while one earning $100,000 will pay $810 less a year.

According to the CAQ plan, the tax cut would then be 0.25 per cent a year until 2032, when it will reach 2.5 per cent. The cuts would be financed by Quebec’s Generations Fund.

The electoral commitment has been criticized by many social equity groups that feel the cuts will only benefit those who are well off. The business community is divided on the issue.

Some groups argue it is time to reduce Quebecers’ tax burden while others say the province should get its finances in order before giving up revenue.

Meanwhile, Girard says the forecasts in Tuesday’s budget will be “of the same order of magnitude” as those contained in the government’s economic update last December.

“We had a forecast that was very conservative,” Girard said on Monday. ” I have always said it is undeniable that the economy will slow in 2023 and Quebec is well positioned to face any adversity.

“We have the tools, the capacity, and we’ll face it. I think tomorrow’s budget will help.”

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