2024 Quebec economic update: Budgetary restraint returns

Quebec Finance Minister, Eric Girard, presented his economic update this morning and one word can sum up this exercise: restraint. Minister Girard's job is not simple at the moment. With the largest deficit in history at $11 billion, we are no longer in a period where new spending is on the agenda. Postponing projects and tax measures is never popular with the population. Workers aged 60 to 65 will not be particularly happy with what is being shared today. By announcing that spending will only increase by 1.6% and 2.1% for the next two years, the word "austerity" will be on many people's minds.

François Legault's government is still going through a troubled period. The recent poll presented by the Leger firm places the Coalition avenir Québec (CAQ) at its lowest level since 2026, 14 points behind the Parti québécois (PQ) which will have led voting intentions throughout 2024. Will this update move the needle positively in the polls? I don't think so.

Citizen expectations are high in health as well as public services, but nothing announced today suggests the situation will improve soon.

In fact, some people will pay more attention to the annoncement made by the Prime Minister, Justin Trudeau, who unveiled at the same time a GST break for the holiday period and a $250 cheque in the spring. A gift that is likely to get much more ink than the financial control announced in Quebec.

Highlights of the economic update

• $1.2B to support public transit companies and the Montréal Economic Development Fund and the Capitale-Nationale Region Fund.
• $252M to support the forestry sector, including wood processing and reforestation efforts.
• $218M for access to housing and work income supplements for social assistance recipients.
• $433M to address flood impacts, new cell sites and policing coverage in Nunavik.

Opposition reactions

• Parti libéral du Québec (PLQ): According to Marc Tanguay, interim leader of the Parti libéral du Québec, François Legault's government is leading Quebec into decline. The PLQ says cuts in health, higher education and francization allow the government to claim the deficit is still $11 billion. The PLQ estimates it at over $15 billion.
• Québec solidaire (QS): Québec solidaire considers that the spending increases announced for the coming years will reduce services to the population and that cuts are inevitable. Member of the Assemblée, Vincent Marissal, says the government is moving closer to austerity.
• Parti québécois (PQ): The Parti québécois says the CAQ government has increased bureaucracy and made frivolous spending since 2018, which is why Minister Girard has to make cuts now. Pascal Paradis, member of the Assemblée nationale du Québec, decries the cuts to francization.

Towards a major cabinet shuffle?

Premier Legault has not often used the cabinet shuffle card since taking office, but is it time now? When a government gets bogged down and simple actions seem complex to implement, a reshuffling of the deck can be an interesting idea. A cabinet shuffle is not a miracle solution, but it can change the government's narrative and start 2025 on a new footing.

For a party trailing in the polls, however, a cabinet shuffle can create its share of negative issues. A demoted minister could decide to resign as a member of the Assemblée and a by-election is not what Premier Legault wants right now.

The Premier's team faces some great challenges in the coming weeks, but one thing is certain: today's economic update will not allow the CAQ government to rebound in the polls. If Mr. Legault really wants to run again in 2026, concrete actions will have to be taken in the near future.