Quebec on track to balance books in 2016, finance minister reports

Finance Minister Carlos Leitao provided an economic and fiscal updateThursday that showsQuebec is on track for a balanced budget in2016.

In its June 2014budget, the province had forecast a budget deficit of $2.35 billion. By the time it released its 2015-2016 economic plan, last March 26,it had reduced that forecast deficit to$1.1 billionlargely by reining in spending.

"We have had to make decisions that have, at times, been difficult but keeping in mind that citizens will benefit," said Leitao.

Loosening strings for students

With a balanced budget on the horizon, Leitao saidthe government will re-invest $100 million in education over the coming months:$20 million this fiscal yearand anadditional $80 million annually, beginning in 2016-2017.

Those amounts representan increase in education spendingof just.12 per centfor the rest of this fiscal year and .5 per centnext year.

However,thatgestureshould help soften the Couillard government's image in the wake of unpopular austerity measures.

Conscious of the fact expired contracts with teachers and other public sector workers are still notsettled, the finance minister made it clear that the new spending will go to front-line services for students most in need and not to teachers' salaries.

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Other highlights include:

• Higher than anticipated economic growth compared to the rest of Canada (1.5 per centthis year and 1.7 per centprojected for 2016)
• 58,500 jobs created between Mayand October 2015

In the March2015 budget,the books were to be balanced with no tax hike.

At the time it tabled that$100-billion budget, the Ministry of Finance also forecast two per cent growth in 2015 and 2016 a figure whichLeitao admitted Thursday his ministry has had to scale back.

"I'm not too worried about that," Leitao said."Our fiscal plan is built upon what I think are fairly conservative and prudent economic assumptions."

Fiscal health 'deteriorating': PQ

Contrary to Leitao'srosy fiscal picture, the opposition critic for finance, Parti QubcoisMNA Nicolas Marceau, said an increase in thedebt to GDPratio shows, in fact, the province's fiscal healthisdeteriorating.

"Nothing is dealt with when it comesto public finances," Marceau said, dismissing as insignificant the extra money Leitao said he has found for front-line education services.

That was echoed by Franois Bonnardel, the finance critic for the Coalition Avenir Qubec.

"Having $100 million [more] in education is a small amount," Bonnardel said. "We need a lot more over the next years."

Qubec Solidaire spokesperson, MNA Amir Khadir, went further still.

"In fact, what they say [is],'We have planted a sworda knife in public education.Now, we're going just retract [it] a few millimetres.'"