Quebec to spend surplus on eliminating health tax

CTV Montreal: Quebec’s Fiscal surplus Quebec is in the black, so the province will cut taxes, pay down debt, and spend more on healthcare

Quebec's finance minister says the province finally has its debt under control and so can now afford to spend $2.2 billion over the next three years on infrastructure, healthcare, and education.

In a mid-fiscal-year budget update on Tuesday, Carlos Leitao said the provincial government is now in a position to eliminate the health tax for all Quebecers on Jan. 1, 2017, two years ahead of schedule.

Leitao had promised in March 2015 to begin wiping out the health tax for low-income Quebecers in 2017, and to eliminate it for everyone in 2019.

This will cost the provincial government $179 million in the current fiscal year.

"Now that our house is in order, we have the means to change things to improve the lives of Quebecers," said Leitao, who, in addition to spending more on healthcare and education, also wants to take measures to improve the economy in rural Quebec.

Leitao said it's all a sign that steady, patient work and so-called austerity measures have been effective.

"The starting point was one in which the deficit would have reached $7 billion if we had not taken the measures which we did," said Leitao.

Leitao the $2.2 billion breaks down to an extra $300 million per year on health, and an extra $110 million per year on education starting in the 2017-2018 fiscal year. For the remainder of the current fiscal year, the government will also kick in an extra $100 million for health and $35 million for education.

"We slowed the pace of program spending, we kind of tilted the curve, the spending curve, to allow us now to maintain public spending at the level that is a little more generous, if you want to use that word, and sustainable," said Leitao.

Lion's share for debt, infrastructure

Aside from reducing the province's debt, the bulk of the new spending in the next fiscal year would be on infrastructure.

Leitao is planning to spend an extra $400 million on hospitals, schools, sporting arenas, roads, and public transit.

Rural development programs will get $100 million extra both this year and next year.

In total, the province will spend $2 billion more than anticipated on debt reduction, and will reduce taxes by $394 million.

Parti Quebecois Finance Critic Nicolas Marceau was not surprised by the surplus, nor by Leitao's promise to spend more now.

"That was clearly a plan so that they could later on, and we're entering the phase where they are distributing electoral candies. And when you do that by cutting services to the most needy of the population, that is shameful," said Marceau.

CAQ leader Francois Legault agreed that the Liberals had chosen to hurt those least well-off.

"I think they built huge surpluses on the back of the taxpayers," said Legault.