The Ford government of Ontario, stuck in cost-cutting mode, is saddled with a $7.5-billion deficit for 2018-19.
In Quebec, thanks to four years of cost-cutting by the previous Liberal government, Premier François Legault is riding a $7.5-billion surplus in 2018-19 and, according to an independent economic forecasting body, Quebec is heading for a surplus that could exceed $8 billion this year.
Quebec, having trailed Ontario in economic performance for some time, reported 5% unemployment in May, to Ontario’s 5.2%. The bond-rating agencies have noticed, giving formerly lagging Quebec “stable” credit ratings on its provincial debt.
As well, a joint study on middle-class incomes by Montreal’s La Presse newspaper and Statistics Canada found that a combination of better-paying jobs, provincial tax cuts and the federal government’s Canada Child Benefit mean a Quebec family with two children is better off than their counterparts elsewhere in Canada.
The study, which covered the year 2017, found that the middle class accounted for 41.9% of the Canadian population. In Quebec, that percentage rose to 47.4% – the highest in Canada. British Columbia was significantly behind Quebec, with 40.3% of residents classified as middle class, followed by Alberta at 40% and Ontario at 39.7%.
True, Quebec received $13 billion in federal equalization payments for 2019, and its share of the federal program, meant to offer all the provinces equal spending capacity, is still rising.
Quebec may have more middle-class earners, but it has fewer high net-worth individuals. Legault wants to correct that situation, pledging to make Quebecers richer. And while he also wants to wean the province off equalization, he argues now that Quebec deserves the federal top-off and he is unwilling to give it up.
The Legault government is giving back some of its surplus cash by investing in infrastructure: roads and bridges, hospitals and the province’s crumbling schools.
But now, Quebec’s public sector – representing 554,400 positions in health care, education and others in the public sector – argues that after bearing the brunt of spending cuts under the previous Liberal government, Legault’s Coalition Avenir Québec government owes them something.
Their current collective agreement expires March 31, 2020, and negotiations are to begin this autumn.
Legault already says that employees cannot expect pay increases greater than the rate of inflation, with a few exceptions. He says the surplus his government enjoys does not belong to the unions representing public-sector employees or to pressure groups; rather, it belongs to all Quebecers.
As a start, he has given some of the surplus back in tax breaks and lower-cost daycare. As well, Quebec will invest about $3 billion of its surplus this year in the province’s Generations Fund to offset the provincial debt.