Future looking dark for Quebec’s finances

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Pontiac Perspective  Peter J. Gauthier


Pontiac Perspective  Peter J. Gauthier

There is no question the Quebec government faces some very serious financial issues; by 2015, the provincial debt will be $200 billion. The yearly service charges on this debt are $10.6 billion. To add to these financial woes, Quebec has one of the highest debt-to-GDP ratios in the developed world, which makes borrowing more expensive. Something needs to be done to bring order into Quebec’s finances. The government has taken some drastic measures, but are they the right ones?
Premier Couillard has established a commission to review the issues and make recommendations on areas where the government can reduce expenses without affecting basic services (the Ongoing Program Review Committee). However, the finance minister, Carlos Leito, has already announced budget cuts of $2.7 billion. These cuts relate primarily to education, health services, and infrastructure; day care costs will also be increased, school boards have had their budgets frozen and some will see a reduction in payments from the province, and doctors have seen their expected and merited pay increases cut in half. The election promise of a $1.5 billion investment in infrastructure improvements has been put on hold and the home care program has also been scrapped.
The consequences of these cuts will have the most noticeable effects on those in the lower income brackets. Cuts in doctors’ pay will only result in more doctors leaving Quebec to work elsewhere, adding to the serious problem of doctor shortage that already exists.
Education cuts will result in more high school drop-outs and fewer CEGEP and university graduates.
Lack of needed improvements to infrastructure will increase transportation costs;       people in rural areas, such as the Pontiac, can expect more costly vehicle repairs and more time lost in     commuting to work. But bankers and financiers     will see the government doing something and will approve the swift, determinate action of the minister of finance.
The problem is that these quick fixes are not easily undone; they become permanent despite what the Ongoing Program Review Committee may eventually recommend. More seriously, the “haste makes waste” result will have unexpected negative consequences that will make real remedies in the future more costly and less effective than a more    careful, well planned approach could achieve.
It took Quebec more than thirty years to create the financial crises we now face. To assume that one swift blow without detailed investigation into consequences will put things right is to place a high risk on an improved future; most would claim the risk is too high. A sound and     permanent solution will take time, and failure to do it properly will only darken Quebec’s financial future.

Pontiac Perspective  Peter J. Gauthier
Pontiac Perspective  Peter J. Gauthier