Signs of opposition to the Couillard government are omnipresent in Quebec. Police officers in garish combat pants. Firefighters painting their fire trucks black in protest.

As many as 200,000 Quebecers demonstrated across the province against an austerity agenda designed to reduce the province’s huge deficit: the cost of daycare for higher-income families will rise to a top rate of $20 a day, from about $7.

The health minister, once the most vociferous advocate for Quebec’s medical specialists, rolled back a pay increase he negotiated and now says doctors do not work hard enough. The public payroll will be cut by 2%, after a hiring freeze was deemed insufficient.

Still, ignoring the grumblings, Finance Minister Carlos Leitão’s autumn budget update managed to be upbeat. Falling oil prices, the recovery in the U.S. demand for Quebec’s exports and the lower Canadian dollar, the minister says, mean tax receipts are up and a balanced budget by 2015-2016 is within reach.

In Leitão’s June budget, he set out $3.6 billion of the $7.3 billion in cuts needed to balance Quebec’s budget next year. The update also identifies $2.5 billion more in savings, leaving $1.2 billion in additional cuts to be found.

On a positive note, Leitão expects Quebec’s economy to grow by 1.6% this year, then rise by 1.9% in 2015. He also announced incentives for small business. These include a $162-million reduction in payroll taxes on active businesses with payrolls of less than $5 million. There will also be a three-year deduction for these firm’s transportation costs, starting next year.

The province will contribute $30-million to a venture-capital fund for small businesses, and changes in Quebec’s R&D tax credits will favour small business. Together, these measures will erase the gap now favouring small businesses in Ontario, the minister says.

On the revenue side, the 2% capital tax that insurance companies pay will rise to 3%. There will also be a temporary increase in payroll taxes for banks and other financial institutions, ranging from 0.18% to 1.68%.

“They’ve done very well over the past few years,” Leitão explains. “We think they are able to do this without any disruption at all.”

The capital tax hike for insurance companies will bring in $128 million in 2015-2016; the temporary surtax on financial institutions will add $125 million next year.

Leitão’s update also proposes higher registration fees for gas-guzzling cars and the extension of Quebec’s cap-and-trade regime, setting a ceiling on greenhouse-gas emissions on all distributors of hydrocarbons.

Environment Minister David Heurtel explained that hydrocarbon distributors must buy carbon credits, now auctioned at $11.40 per tonne of CO2, adding about 2¢ a litre to fuel prices, which have dropped about 20¢ in recent months. Distributors will receive $350 million from the climate change fund to help them develop innovative green technologies.

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