Quebec Finance Minister Carlos Leitao outlines details as he presents a financial update, at a news conference at the legislature in Quebec City, on Nov. 21, 2017.Jacques Boissinot/The Canadian Press
Quebec will cut income taxes and send cheques to parents after a fiscal update designed to give some of the province's growing surplus back to taxpayers and put money in voters' pockets in time for an election next year.
The province is dropping the tax rate by one percentage point to 15 per cent on the first $42,000 of income, allowing a taxpayer making that amount or more to keep another $278 each year. The province will also give families $100 for each of their school-aged children to help pay back-to-school costs.
Finance Minister Carlos Leitao announced the measures on Tuesday in a budget-style financial update that covered 2017 and 2018 and combined will take $1.1-billion out of provincial revenue each year.
The province is still on track for a $2.2-billion surplus for the 2017-18 fiscal year, fuelled largely by past spending restraint and economic growth of 2.6 per cent – an increase of almost one percentage point.
"Quebec is doing well, and it allows all Quebeckers to benefit from that health," Mr. Leitao said in updating his spending and revenue plans. "We put the house in order, we promised we would give Quebeckers some breathing space and that's indeed what we're doing."
Some taxpayers will start to get money back as early as Jan. 2, when payments to parents for 2017 school expenses will start. Most taxpayers will start to see refunds when they file their income taxes in the spring, and on July 1, parents will get cheques for the next school year.
Combined with tax cuts announced in March, a family with two schoolchildren and two parents making $45,000 each will pocket about $1,200 more a year.
The platform of the conservative opposition party Coalition Avenir Québec, which recently passed Premier Philippe Couillard's Liberals in the polls, included similar amounts of tax cuts.
"The Liberals see the CAQ in the rear-view mirror, so they're taking out the old political playbook," said Gabriel Nadeau-Dubois, a member for the left-wing Québec Solidaire party. "It's not a vision, it's a yoyo diet."
The CAQ's finance critic, François Bonnardel, said the Liberals are "playing about their last card" before the election that is 11 months away.
"Since our party was born, the Liberals have taken our plans, so bravo," Mr. Bonnardel said. "But Quebeckers are not fools. The Liberals took that $1,200 from their pockets over the past several years, and now they're giving back what they took. It's crass and opportunistic."
CAQ Leader François Legault gave the government hearty and ironic praise.
"I'm so happy the government saw the light," he said. "I think the polls helped them see the light."
The Liberals say they will spend an additional $1-billion on health care and education over four years, on top of the $3-billion for education and $2-billion on health care announced in the most recent budget. The spending of both those departments was reined in below inflation early in the Liberal mandate.
The government announced it would spend $2-billion over five years to fight poverty, saying details would follow. It is also on schedule to add $2.5-billion in surplus money to the $13-billion Generations Fund – cash the province is setting aside to offset debt.