Montreal, November 25, 2021 – Following the tabling of the economic update by Finance Minister Éric Girard, two economists from the Montreal Economic Institute had some thoughts on the matter.
“It’s very encouraging to see that the Quebec government is on track to return to a balanced budget sooner than expected,” says Maria Lily Shaw, economist at the MEI. “There is a real consensus in Quebec on the topic of budgetary rigour, and this is good for our economy. The federal government should take a page from Quebec,” continues Ms. Shaw.
“Unfortunately, the news is not all good. The government is charging ahead with an interventionist economic strategy that has produced such turkeys as the McInnis cement plant saga. Since 2014, public investments have grown nearly four times faster than private investments. Not only that, but today the government is proposing to create a whole new public corporation in order to subsidize green hydrogen projects. More than ever, Quebec is the subsidy champion,” adds the economist.
“The size of the government just keeps growing. The number of government employees has increased by 13% since 2018, while the private sector is dealing with a labour shortage,” points out Olivier Rancourt, economist at the MEI. “The government’s massive hiring spree can only exacerbate the worker shortage facing our entrepreneurs,” he says.
“Even if the government is currently managing to control its spending, one day we’ll have to reconsider the ever-growing number of civil servants. Quebec has 997 civil servants per 100,000 population, nearly twice as many as Ontario. Some serious reflection is called for,” concludes Mr. Rancourt.
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The Montreal Economic Institute is an independent public policy think tank. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
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