When Quebec Finance Minister Eric Girard said that “the next six months would be very difficult,” the statement was as much a warning to his party as it was to Quebecers.
The autumn economic update or mini-budget has traditionally been an opportunity for governments to convey their narrative and curry favor with voters.
But the slowing economy highlights the shortsightedness of the Coalition Avenir Québec (CAQ) in addressing the housing crisis and climate change – both long-standing issues – that could harm the government’s popularity in the coming months.
First, Quebecers will have to deal with a CAQ government that is not spending as much as they are used to.
The pandemic forced the CAQ government to make significant expenditures, leaving the province in a losing position but winning points for François Legault’s government among voters, giving the CAQ a landslide victory and a second consecutive term.
Now, the province’s economy is in crisis, with Quebec projecting economic growth of 0.6 per cent in 2023. This year’s deficit is expected to be $3 billion, up from $1.67 billion forecast in the spring budget.
The government will also use two-thirds of its contingency fund for measures to address unforeseen events such as wildfires.
Girard even pointed to Quebec’s months-long negotiations with public sector unions as one reason the government has few buffers left, sending a clear message of financial caution to the 400,000 public sector workers who use strikes to seek salary increases that would keep up with inflation rates.
Philippe Gougeon, director of AppEco and Girard’s former chief of staff, says the modest economic update, which offers no new measures to combat inflation, helps keep the province on track to balance the budget, but may cost it political points. to the CAQ.
“It’s about plugging holes,” he said. “It just goes to show how small an update it is with few resources.”
Reactive measures in the face of the real estate crisis and climate change
Although Legault told reporters on the day of the update that the fact that Quebecers can afford housing is “the most important thing,” the announced funds will not make a dent in the crisis.
The government plans to spend $1.8 billion over five years (half of which comes from the federal government) to build 7,500 affordable housing units and 500 homeless housing units in the province. To put this in perspective, the Canada Mortgage and Housing Corporation estimates that Quebec needs to build more than 800,000 units by 2030 to solve affordability issues.
Quebec’s plan is to put some of the new money into an existing program, the province’s affordable housing program (PHAQ), which housing advocates say will make it harder for non-profits to submit projects.
“There are a lot of problems with that program,” says Amy Darwish, program coordinator. Parc-Extension Action Committee. “It’s much more geared toward the private sector. Many nonprofit groups are going to have to compete with the private sector for that funding.”
“New funding for social housing is good news, but what is proposed is a drop in the bucket compared to what is needed,” Darwish added.
Maryane Daigle, community organizer for the Réseau d’aide aux personnes seules et itinérantes de Montreal (RAPSIM), stresses that the advertisement focuses solely on buildings, when homeless people often also need social support.
Therefore, funding for social support services should be accompanied by announcements about new housing.
The government’s approach is shortsighted, advocates say, because the affordable housing units that are promised will not necessarily remain affordable after the government program expires.
The government’s tendency to apply stopgap solutions, such as millions for homeless shelters, shows that the CAQ “doesn’t take the housing crisis seriously at all,” RAPSIM’s Daigle added.
On the environment, the mini-budget contained almost $1 billion for climate change issues. But a breakdown of the amount shows adaptation was a minor part of the funding ($292 million over five years), a far cry from preparing the province for the reality of extreme weather.
“What we’ve seen so far is kind of a piecemeal effort trying to address major risks like wildfires or floods,” said Amy Lesnikowski, director of the climate adaptation lab at Concordia University. “We need to be more strategic about how we approach adaptation in Quebec.”
As the government attempts to address the housing crisis and climate change, it does so while attempting two other gargantuan tasks: reforming Quebec’s overburdened public health system and reorganizing the education system.
But there are other things up in the air too, issues like Quebec City’s third transportation link, promised before the last election, abandoned after the CAQ won and now potentially back on track after the CAQ suffered a electoral defeat in Quebec City, despite the long-awaited feasibility studies that advise against it.
That (and the government’s recent decision to increase tuition fees for university students coming from other Canadian provinces or abroad) has fueled concern about how the prime minister chooses priorities.
The latest surveys of Leger shows that the gap between the CAQ (with 30 per cent of voters’ intentions) and the Parti Québécois (PQ) (with 26 per cent) is narrowing. Voter satisfaction with the CAQ fell eight percentage points, from 48 percent to 40, in just over a month. And PQ leader Paul St-Pierre Plamondon, who currently leads a group of four, has overtaken Legault as Quebecers’ first choice for premier.
Most of the measures set out in Girard’s mini-budget will take at least five years to implement, meaning Quebecers will only begin to feel their impact until after the next provincial election in 2026.
Experts will expect Girard to show signs of a long-term vision for addressing pressing social issues in his spring budget, scheduled for March.