PQ Table First Budget

PQ Finance Minister Nicolas Marceau tabled his first budget today with hopes of eliminating the deficit by Spring 2014 and shifting the tax burden to the upper class. The PQ aim to have this budget be a balancing act between certain tax hikes and cuts to combat the spiraling economy while putting families first.

The Finance Minister made some statements about the budget, claiming that it lays down the framework for their vision of Quebec and aims to cut spending in a way that they hope will have a minimal impact on services.

“This budget clearly sets forth our economic vision and our government will not stray from it,” Marceau said.

“We are laying today the groundwork for sound, long-lasting prosperity for all.”

“We want to have cost reductions where it doesn't touch citizens,” Marceau said.

 So let's take a look at this budget and what it means for you.

Changes in Tax Policy

New Tax Credits

  • Children's sports and cultural activities
  • Companies are exempt from taxes for 10 years if they invest more than $300 million in specific sectors

Tax Hikes

Income Taxes

  • 1.75% additional tax for those with income tax brackets: Greater than $100,000
    • This means that a person earning $120,000 will pay the current tax rate for the first $100,000 and pay an additional 1.75% for the $20,000 above $100,000

Sin Taxes

  • $0.02 per cigarette ($0.50 a pack)
  • $0.03 per bottle of beer
  • $0.17 per bottle of wine
  • $0.26 per bottle of spirits
Aim: Generate $230 million/year of new revenue

Health Taxes

  • $0 tax for those with income brackets: Less than $18,000
  • $100 tax for those with income brackets: $18,000 and $40,000
  • $200 tax for those with income brackets: $40,000 and $130,000
  • $1000 tax for those with income brackets: Greater than $130,000
The initial PQ promise to scrap the $200 healthcare tax was replaced with the preceding progressive tax plan.

Cuts

  • Cut of $1.5 billion to infrastructure over 5 years 
    • Part of a spending cap to $9.5 billion from the current $11 billion.
  • 2,000 jobs cut from Hydro Quebec through attribution

Changes to Public Services

Prices of Services

  • Electricity rates will increase by a rate indexed to inflation
  • The tuition hike on University students was abolished

New Services

  • Create 15,000 new subsidized daycare spaces

Fiscal Outlook


Deficit: $1.5 billion (projected) for the fiscal year of 2012-2013.

Previous deficits:

2011-2012: $3.3 billion (Liberal)
2010-2011: $4.2 billion (Liberal)
2009-2010: $3.2 billion (Liberal)

With Respect to Election Promises

Broken Promises

  • Eliminate $200 health tax

Kept Promises

  • Increase income taxes on people earning more than $130,000
  • Tax credit for children who participate in sports and cultural activities
  • Created 15,000/250,000 new daycare spaces (Satisfied Liberal Promise)
  • Abolished the tuition hike on University students

Read the Platform Comparison of the last election for more details

Opposition Response

Liberals:

“We’re going to oppose this budget because it’s a disappointing budget. It’s an incomplete budget and it contains many uncertainties,” said Liberal finance critic Raymond Bachand.

Coalition Avenir Quebec:

“They don’t respect their promises,” CAQ leader Francois Legault said, pointing to the government’s backtracking on platform issues. “They were elected on false representation.”

Quebec Solidaire:

Difficult to support a budget that the former Liberals could have presented.


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