Financial framework of the PCQ: “Not cuts, but reallocations”, according to the party

PCQ financial framework: “Not cuts, but reallocations», according to the party

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LAVAL | Even if their electoral commitments would deprive the State of more than $24 billion in revenue in five years, the Conservatives foresee budget surpluses as early as the third year of a mandate, thanks to a limit to 3.5% of the growth of expenditure of each ministry.

“We are the only party that presents a balanced budget over the period observed,” boasted Éric Duhaime on Wednesday during the unveiling of the financial framework of the Conservative Party of Quebec (PCQ), in a hotel in Laval.

Budget balance would be achieved after two years of deficit, according to party estimates. The budget surplus promised by the PCQ would be $934 million in 2024-2025, after payment to the Generations Fund. The surpluses would then be larger, reaching up to $6 billion in 2026-2027. 

A Conservative government would thus reduce the weight of the debt in relation to GDP from 42.1% to 34.3%, a more ambitious objective than the other parties.  

Éric Duhaime believes that such a performance is possible because of the “dynamic effect” tax cuts and bureaucratic cuts would have on the economy.

Slow down spending

The Tory's flagship promise would drastically affect the revenue column on the government's books. The increase in the amount of the basic exemption and the 2% tax reductions for the first two tax brackets would alone generate a shortfall of $29.1 billion, according to the party's forecasts.  

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To make up for this lack, Éric Duhaime's team plans to reduce spending by more than $32 billion in five years. The PCQ hopes to get $13 billion by radically reducing aid to businesses.  

It also plans to save $8.9 billion by capping state spending increases at 3.5% from 2025-2026. This figure would be 9.8 billion according to a correction made by the PCQ on Wednesday, but which no detail in the financial framework can corroborate.  

“The addition of private health care”, which consists among other things in entrusting the management of certain hospitals to private companies, would save $ 4.5 billion, estimate the Conservatives.  

Finally, eliminating subsidies for the purchase of electric vehicles would save the government $2 billion by 2026-2027.  

“We are not cutting expenses. We are slowing the increase in spending,” summed up the architect of the PCQ’s financial framework, Adrien Pouliot.  

Health

The Conservatives' plan calls for the tax cap law to have a “significant impact” on the Department of Health and Human Services. Called to specify the nature of this impact, Éric Duhaime argued that “the dynamic will change” with the addition of the private health sector and the implementation of a “fee for service” financing method in hospitals.

To support his thesis, the PCQ's financial executive cites a 2013 study, an interview with Dr. Fernand on V-Télé in 2011, and a text published in La Presse la same year.

“That did not mean a significant impact in terms of the amount of money,” added Adrien Pouliot when asked for more details.

The businessman maintains that the Conservatives will continue to increase health budgets, but less quickly than expected. For next year, they would grant a billion dollars less to the Ministry of Health and Social Services than the PQI currently provides.

“A billion dollars out of 52…I think that we are capable of making that little effort. We just have to look at the organization chart of the Ministry of Health and say to ourselves: um, there may be a little cleaning to be done on that side.

Adrien Pouliot also noted that pending the addition of the private health system, health budget increases would be greater than 3.5%. In 2022-2023, this budget would be increased by 5.4%, and by 10.7% in 2023-2024. Then, in the third year of a Conservative government, budget increases for this department would be limited to 2.5%.

Hydrocarbons

In during the first weeks of the campaign, Éric Duhaime repeatedly affirmed that the exploration and exploitation of hydrocarbons would represent billions of dollars in profits for the State.

However, the Conservatives' financial framework provides for only revenues of $394 million related to the exploitation of shale gas.

“It's a slow process (…). We cannot, overnight, start digging and making billions, agreed Éric Duhaime. But there is an upward curve, and this curve, we intend that it will continue for at least a decade or two”.