Budget: Quebec must not fall back into a spending spiral

MONTREAL, March 23, 2018 /CNW Telbec/ - In tabling its budget this coming Tuesday, the Quebec government must not squander the rigour of recent years by opening the floodgates and spending with abandon.

"Even though government spending remains very high in Quebec, careful management these past few years has generated surpluses, the economy is doing well, and the unemployment rate is low. Instead of picking up old bad habits, Quebec should instead give itself some room to manoeuvre with which to handle economic ups and downs," argues Germain Belzile, Senior Associate Researcher at the MEI.

According to reports, the next budget will include among other things a considerable increase of 4.5% in health spending, or nearly $1.7 billion. Unlike in recent budgets, there will be no surplus.

Obviously, many groups want the government to spend more money on health and education on the grounds that this budget follows years of "austerity." Yet it is important to point out that health and education expenditures, in real terms, have increased significantly in recent years.

"Spending in these sectors over the past ten years has grown more quickly than either the general population or the student population. But these additional sums have had little impact on the quality or accessibility of public services," says Germain Belzile. "The problem is not that we don't spend enough, but that the organization and delivery of services are inefficient, as the province's Health and Welfare Commissioner reiterated in a report, before his position was abolished."

Quebecers are of the same opinion. When polled by Leger in February, 71% thought that the additional amounts injected over the past ten years in health and education have not yielded results. "Before starting to spend again and giving gifts to interest groups, the government should completely re-examine the way it delivers public services; it's the only way things will improve," adds Mr. Belzile.

The MEI does salute the government's decision to use $10 billion from the Generations Fund to reimburse the debt. "The main purpose of this Fund is to reimburse the debt, so it's obviously a good idea to start to use it, especially as this prevents politicians from one day using this money for other things," concludes Michel Kelly-Gagnon, President and CEO of the MEI.

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

SOURCE Montreal Economic Institute