Quebec Provincial Finance Minister Carlos Leitao provided an economic and fiscal update Thursday that shows his province is on track for a balanced budget in 2016.
In its June 2014 budget, the province had forecast a budget deficit of $2.35 billion. By the time it released its 2015-2016 economic plan, last March 26, it had reduced that forecast deficit to $1.1 billion – largely by clamping down on spending.
Now, with a balanced budget looming, Leitao said the government will re-invest $100 million in education over the coming months: $20 million this fiscal year and an additional $80 million annually, beginning in 2016-2017.
Those amounts represent an increase in education spending of just 0.12% for the rest of this fiscal year and 0.5% next year.
However, that gesture should help soften the government of Philippe Couillard image in the wake of unpopular austerity measures.
Conscious of the fact expired contracts with teachers and other public sector workers are still not settled, the finance minister made it clear that the new spending will go to front-line services for students most in need – and not to teachers' salaries.
Quebec also expects higher-than-anticipated economic growth compared to the rest of Canada (1.5% this year and 1.7% projected for 2016). The provinces also pointed to 58,500 jobs created between May and October 2015
In the March 2015 budget, the books were to be balanced with no tax hike.
At the time it tabled that $100-billion budget, the finance ministry also forecast 2% growth in 2015 and 2016 – a figure which Leitao admitted Thursday his ministry has had to scale back.
