Transit and taxes: mixed reactions to Quebec budget

Quebec Finance Minister Eric Girard reads his budget speech at the legislature in Quebec City. (Jacques Boissinot / The Canadian Press)

The Quebec government's fall fiscal update, which announced billions of dollars in new spending, was met with mixed reactions.

The Coalition Avenir Québec (CAQ) government announced $2.1 billion in the economic update that includes an unchanged $11 billion deficit from the March budget.

The fiscal update includes $879.6 million in new funding for public transit companies over four years, in addition to the $265 million that was announced in fall 2023.

The Société de transport de Montréal (STM) will get part of the new money, but said it falls short of what it said it needs to make the kinds of investments needed to make to keep the network reliable for users.

"It is important to understand that this announcement relates only to the operation of our network, and not to investment in network infrastructure," said STM Director General Marie-Claude Léonard.

"Ensuring sufficient funding to maintain our assets and guarantee the longevity and reliability of our infrastructure is currently the main challenge in maintaining an attractive service offering for customers. The ageing of our assets is already having an impact on our ability to deliver the service."

The STM said it had to commit to cutting spending by $100 million last year, which included slashing hundreds of positions. In its 2025 budget released last week, it said it has already reduced spending by $36 million.

Reacting to the provincial economic update Thursday, the STM's board of directors said "new sources of revenue" are still needed.

"Growth in supply will be essential to improve the attractiveness of public transit, meet the demands of employers, reduce road congestion and support the economic and demographic growth of the metropolitan region," said chairman Éric Alan Caldwell.

Meanwhile, the regional transit authority for the Montreal area, the Autorité régionale de transport métropolitain (ARTM), had a more positive reaction to the news.

It said the new funding "comes at just the right time" as public transit agencies are facing financial crunches and are looking for more predictable streams of funding.

"We now know the funding conditions up to 2028, which represents a valuable planning tool for all industry players," said Benoît Gendron, the head of the ARTM.

Changes to tax system

Quebec’s decision to revise the tax credit for career extensions will impact approximately 200,000 seniors, who could lose about $1,000 in credit starting in 2025.

The change to the tax system aligns with the government’s goal of balancing the budget by the 2029-2030 fiscal year.

As part of the review, the government decided that Quebecers between the ages of 60 and 64 will no longer be eligible for a tax credit that was introduced in 2012 to encourage older workers to stay in the workforce.

Finance Minister Eric Girard said the average age of retirement in Quebec has risen to 64.7 years in 2023, up from just over 61 years in 2011.

"For people between the ages of 60 and 64 years old, the historic gap that existed with Ontario has practically disappeared," Girard said.

Additionally, to make the tax credit more "effective," the government will exclude seniors with a high net income and refocus on low- to middle-income workers aged 65 and over.

One seniors’ advocate says this change could have a positive impact on seniors who need assistance.

"I think that as long as they're refocusing and redirecting the funds that [the government] could be saving to the seniors who are the low income dealing strictly with pensions,” said Ruth Pelletier, the founder of Seniors Action Quebec.

"So, if these seniors can be assisted financially to either get the services that they're entitled to, if their income is really bare bottom, or if they don't have enough to buy services to remain at home, these are all good things."

However, political analyst Raphaël Melançon told CTV News that cutting the tax credit could worsen workforce shortages.

“I think it’s a very bad idea to do that because we need them. We have a workforce shortage right now in every industry and we need to have skilled and experienced workers,” Melançon said.

“It’s going to harm not only elderly workers who want to go back and work and contribute to society for as long as they can, but it’s also going to harm businesses who need these people to work and deliver services.”

CAQ is 'fooling us,' Liberals charge

As expected, opposition party MNAs came out to attack the CAQ.

The Quebec Liberal Party (PLQ) accused the government of "disguising" the real deficit, which would be $15 billion.

"This government is fooling us," said Liberal MNA Frédéric Beauchemin.

Interim Liberal Leader Marc Tanguay criticized the Legault government's spending choices, in particular the "$6.7 billion in election cheques" and the "$1.1 million per door for seniors’ homes."

Québec solidaire (QS) says that what the government is proposing in its most recent economic exercise "is starting to look like austerity."

"Every day, new groups are saying 'We're being cut, we're being asked to reduce here, to reduce there,'" argued Vincent Marissal.

The Parti Québécois (PQ) claimed that the CAQ is "one of the biggest spenders in the history of modern Quebec," with plenty of "frivolous spending."

MNA Pascal Paradis denounced "budgetary restraint measures that are starting to be felt throughout the network."

With files from The Canadian Press