CAQ finance minister sees balanced budgets and stable taxes in five years
While everyone at the federal, provincial or municipal levels seems to be talking about economic recovery during the ongoing COVID-19 pandemic, the Laval Chamber of Commerce and Industry believes the local business community needs to understand what help is available in order to seize the opportunities offered by the three levels of government.
That at least was a leading point offered by the LCCI prior to an online Zoom video forum they sponsored last month on post-COVID-19 recovery. Among the many elected officials who took part were Quebec Finance Minister Éric Girard who is also Minister Responsible for Laval.
LCCI president Michel Rousseau said buy-local policies that have been emerging almost everywhere as one of the efforts to reverse the economic downturn is the way to go if businesses and individuals in Laval also want to dig ourselves out.
While China used to get failing grades for eco-responsibility, Rousseau suggested the rest of the world will have to wake up and realize that the world’s largest economy has become competitive even in this respect, adding to all other advantages that favour China now.
Finance Minister Girard was asked what he thought Quebec’s economy and the public finance situation might look like five years from now when presumably the pandemic is over. “In five years we will have returned to a balanced budget,” he responded.
“Taxes will not have been increased because we already have a fiscal standing that is significant. In the normal course of events, we would have preferred to keep on reducing the fiscal burden by $2 billion a year if we remained elected. There’s no question of heading down that road.”
‘According to means’
On a more somber note, the finance minister added that “we will have to live according to our means, that is with a level of expenses in conjunction with the revenues of the government.”
Girard was asked how he had been viewing the relaunch of the economy since the beginning of the COVID-19 crisis. “It’s important to say at the outset that what has been going on is first of all a pandemic which has brought about a global recession of the greatest magnitude since the Second World War, and there is a risk of the recession lasting longer than the pandemic,” he said.
‘In five years we will have returned to a balanced budget,’ said Quebec Finance Minister Éric Girard
He pointed out that recessions in turn create “important challenges in public finance” that last even longer than the recessions themselves. “At the economic level, Quebec had to confine itself, that is we had to shut 40 per cent of the economy for two months. And the impact of this is that our unemployment rate has dropped up to 17 per cent. We lost 800,000 jobs. And then began the period of deconfinement.
Jobs recovered, Girard says
“We were closed for March, April and to mid-May, and we recovered 30 per cent of the jobs – 230,000 jobs in May – March and April being the heart of the crisis,” he continued, suggesting that additional recovery of employment also took place in June, while the trend probably also continued through July so that Quebec effectively recovered up to 50 per cent of all jobs lost during the pandemic.
However, Girard warned that by September when it becomes more obvious that a significant number of businesses across Quebec haven’t recovered, the challenge will be greater. He said it was important during the first wave of the pandemic that governments, including Quebec’s, provide significant amounts of financial assistance to workers and businesses in order to ensure that the economy would continue to flow as usual and that it wouldn’t stagnate.
He acknowledged that the CAQ government’s decision to postpone payment of income tax amounts due for 2019 has proven to be one of Quebec’s most popular measures during the crisis, while support provided by Investissement Québec (the government’s targeted business development branch) has also been effective.
Trends to accelerate
“The economy is going to change, but the crisis is mostly going to accelerate trends which were already there,” Girard said. “Family/work conciliation, being at home, online retail: these are trends that were there before the pandemic and will be accentuated by it.” As for how the CAQ government sees the relaunch of the economy unfolding, the finance minister said they see it happening along certain key axes.
He suggested renewal of public infrastructure could prove to be important because the private sector tends to withdraw during recessions. “The government has a role to play by increasing public investments temporarily,” said Girard, noting for example that construction workers need to be kept busy.
Also taking part in the forum were Laval mayor Marc Demers, Sainte-Rose MNA Christopher Skeete, Vimont MNA Jean Rousselle, Laval-des-Rapides MNA Saul Polo, Vimy MP Annie Koutrakis, and Laval executive-committee vice-president Stéphane Boyer (who is in charge of economic development dossiers with the city).