A $ 32 billion hole due to the pandemic

In light of the 2e economic update from the Minister of Finance, Éric Girard, I estimate at 32 billion dollars the budgetary losses attributable to the COVID-19 pandemic that the Legault government will suffer during the four fiscal years from 2020 to 2023.

You should know that the health crisis and the economic crisis triggered in mid-March by the COVID-19 pandemic will have repercussions on four budgets of the Legault government, namely 2019-20, 2020-21, 2021-22 and 2022- 23.

In his budget speech on March 10, Minister Éric Girard planned to declare four budget surpluses for the fiscal years from 2019-20 to that of 2022-23. For a grand total of $ 13.64 billion.

It was the good old days …

COMPULSORY PANDEMIC

As we know, two weeks later, François Legault would have to confine Quebec in order to counter the COVID-19 pandemic which was starting to wreak havoc here, as everywhere else in Canada and around the world.

We know the rest. Many sectors of the Quebec economy have been paralyzed. Some 820,000 workers temporarily found themselves without a job.

And the COVID-19 pandemic has not only had the consequences of drastically reducing government tax revenues, but has also forced them to spend outrageously to help individuals and businesses weather the ordeal and enable government departments. health to face the health crisis.

Like the Trudeau government in particular, the Legault government has deployed a series of financial and economic measures to help Quebecers get through the crisis.

As a result, Minister Éric Girard was forced to revise his recent budget forecasts made in his March budget. A first review took place in June. And given the scale of the crisis, a second budget review was presented yesterday.

HEAVY DEFICITS

What emerges from this 2e budget revision? A portrait of the public finances of the Legault government completely upset compared to the March 2020 budget.

Goodbye to budget surpluses, as was previously the case since the coming to power of Philippe Couillard and his Minister of Finance, Carlos Leitao. The Legault government must instead deal with heavy budget deficits.

For the four fiscal years from 2019-20 to 2022-23, the 2e Minister Girard’s budget review shows an accumulated deficit of $ 18.8 billion over four years.

Thus, instead of ending up with an accumulated surplus of $ 13.6 billion as he predicted last March, Minister Girard now expects to fall into the red with accumulated deficits of $ 18.8 billion.

This difference of $ 32.4 billion between the two figures (surplus of $ 13.6 billion vs deficits of $ 18.8 billion) represents the budget losses that the Legault government will suffer by March 2023 because of the coronavirus pandemic. .

HELP FROM QUEBEC

To get through this historic health crisis, the Legault government implemented a package of financial assistance measures with a total cost of $ 12.7 billion.

  • Strengthening the health system: $ 5.0 billion
  • Support for Quebecers and the economy: $ 5.9 billion
  • Boosting the economy: $ 1.85 billion

Added to this are other financial interventions (investments in infrastructure, business loans, tax deferrals, etc.) that the Legault government has estimated at $ 8.4 billion.

In total, Minister Girard estimates at $ 21.1 billion the sums injected into the Quebec economy by Quebec to fight COVID-19.

Of all the Canadian provinces, he says in his economic update, it is in Quebec that the sums injected into the economy in response to the health crisis have been the largest.

Although we are much less populous, we spent $ 2.4 billion more than our neighbor Ontario.

www.journaldequebec.com

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