Montreal, November 12, 2020 – The Quebec government must recommit itself as soon as possible to balanced budgets and promote renewed economic activity in those sectors most affected by the pandemic, says the MEI. Quebec must also avoid the temptation to involve itself too directly in the economy by arbitrarily subsidizing one company rather than another.
“It’s very positive that the Finance Minister is announcing that there won’t be any tax hikes. However, the return to a balanced budget must happen sooner rather than later,” says Miguel Ouellette, Economist and Director of Operations at the MEI.
“For this reason, the government has to not only resist lobby groups that are always asking for more money, but also carry out a detailed review of its expenditures. It needs to see which of them are less efficient or less necessary, especially when it comes to temporary measures that will need to end once the pandemic is over,” says Mr. Ouellette.
“The government also has to give some oxygen to the economy and to our entrepreneurs by allowing the reopening of businesses that are not the source of outbreaks and that are respecting health guidelines,” he adds.
Quebec has to stop choosing winners and losers
“The government needs to understand that it is not corporate subsidies that will allow us to prosper after the pandemic. By gambling with Quebecers’ money, the government is constantly ending up embroiled in fiascos, from the McInnis Cement plant to Flying Whales. Among other things, reducing these subsidies will help us return to budgetary balance, which will lead to increased investment and job creation,” says Miguel Ouellette.
“Quebec was doing very well before the pandemic, but lockdown measures have had devastating impacts on many sectors of the economy like restaurants and hotels,” points out the economist. “Within reason and given the health measures in place, all economic sectors should be able to resume their activities.”
“The Quebec government has managed public finances rather well in recent years. Unfortunately, today we are faced with an unexpected challenge. We need to roll up our sleeves and find ways to return to a balanced budget as soon as possible, without putting the burden on taxpayers,” concludes the economist.
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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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