Staying the Course: Quebec's Fiscal Balance Challenge
In its upcoming budget, Quebec must stay on a tough road to fiscal balance.This study examines how Quebec’s fiscal balance has deteriorated. By 2009, after 10 years of balanced budgets, the province faced an unsustainable structural deficit which, if left unchecked, would reach a staggering $12 billion in 2013, increasing to $27 billion in 2019. This budgetary imbalance, says Fortin, surfaced even though Quebec’s economy performed relatively well for the last 20 years and amid the recent global crisis. To explain the budgetary slump, the author points to population aging, previous tax cuts, the multiplication of infrastructure investments, program spending growth, expected slowdown of federal transfers, and expected rising interest rates on the public debt. Professor Fortin believes Quebec’s government should stay the course on restoring budgetary balance by 2013/14, while launching healthcare reforms and promoting productivity growth by concentrating its interventions in education, access to foreign markets, competition, taxation, and public infrastructure.
Volume (Year): (2011)
Issue (Month): 325 (March)
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- David Longworth, 2010. "Warding Off Financial Market Failure: How to Avoid Squeezed Margins and Bad Haircuts," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 135, December.
- Stuart Landon & Constance Smith, 2010. "Energy Prices and Alberta Government Revenue Volatility," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 313, November.
- Angelo Melino, 2011. "Moving Monetary Policy Forward: Why Small Steps - and a Lower Inflation Target - Make Sense for the Bank of Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 319, January.
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