Corporate welfare plan: Quebec government could feed inflation, warns MEI

Montreal, February 6, 2025 – Quebec’s intention to reintroduce very generous business support programs – such as it did during the pandemic – in response to the current trade uncertainty is leading to fears of higher price inflation, stated an MEI researcher this morning.

“Before taking inspiration from the subsidy programs put in place during the pandemic, François Legault should remember the inflationary crisis that followed them,” said Gabriel Giguère, senior policy analyst at the MEI. “If the United States imposes these tariffs on us, the last thing Quebecers need is another bout of fast-rising prices.”

Although the implementation of tariffs has been suspended for 30 days, Premier Legault has stated that business support programs are ready for deployment should the threat return.

In recent weeks, Legault has confirmed that he was inspired by the pandemic in designing these aid programs.

The Premier also plans to increase capital spending.

According to a Scotiabank report, excessive government spending during the pandemic was responsible for a significant proportion of the surge in price inflation over the last few years.

Had it not been for this excess, the report goes on to say, the interest rates needed to tame this rise in price levels could have been two percentage points lower.

“Quebec is already facing the biggest deficit in its history, and it would be irresponsible for the government to add to it,” explains Mr. Giguère. “Instead of advocating a spendthrift approach, the government should continue to clean up its finances and use the generated room for manoeuvre to reduce corporate taxes.”

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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