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Quebec must present a plan to return to budgetary balance, says the MEI

Montreal, March 7, 2024 – Despite the pressure exerted by the wage increases granted to public employees, the Legault government should stay the course and quickly return to a balanced budget, concludes a study published by the Montreal Economic Institute this morning.

“Each year, Quebec taxpayers waste a fortune in interest payments on the debt,” says Gabriel Giguère, public policy analyst at the MEI and co-author of the study. “In the current context, with high interest rates, it’s all the more important for the Legault government to commit to a rapid return to budgetary balance.”

In the November economic update, the finance minister was still projecting a return to a balanced budget for the 2027-2028 fiscal year.

The higher-than-expected salary increases granted to government employees represent around $4.1 billion of increased spending for the 2027-2028 fiscal year, compared to last fall’s projections.

As for their net cost, these increases represent an extra $2.8 billion of budget pressure in the 2027-2028 fiscal year.

The researcher reminds us that even before this increase in the deficit, the government projected that interest payments on the debt would reach $11.1 billion in 2027-2028.

The Balanced Budget Act requires that the Quebec government present a scenario for returning to balance within a five-year timeframe when tabling a deficit budget.

The MEI study recommends that the government set up an expenditure review committee in order to identify potential savings.

“By setting up an expenditure review committee, Quebec would give itself the resources it needs to identify and eliminate government waste,” explains Mr. Giguère. “For example, such a committee could help the Legault government keep its 2018 promise to cut 5,000 civil servant positions.”

In Ottawa, the Harper government was able to identify recurring savings of five billion dollars thanks to an expenditure review committee.

During his first term, Premier François Legault had committed to eliminating 5,000 civil service positions. Today, the public service workforce has 5,223 more employees than it did in 2018-2019.

The MEI study is available here.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. 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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