Ministère des Finances : 2002




Press releases 2002-2003 BUDGET Taking action now to ensure the social and economic security of Quebecers Québec City, November 1, 2001 — To ensure the social and economic security of Quebecers, Deputy Prime Minister and Minister of State for the Economy and Finance Pauline Marois tabled the 2002-2003 Budget in the National Assembly today. This Budget contains an action plan that can be implemented rapidly, and provides for $400 million for consumers, $3 billion in public investment (including $500 million for housing) and a series of measures to support businesses and increase personal security. "Québec has been affected by the events of September 11 and by the pronounced economic slowdown that followed. Through this Budget, the Québec government has chosen to act now and to use all of the instruments at its disposal to bolster consumer confidence and preserve jobs by stimulating economic activity. And we are doing it while staying the course with regard to the zero deficit", Ms. Marois said. The action plan tabled by the Minister as part of the 2002-2003 Budget focuses on three main areas of intervention, namely, reinforcement of consumption, acceleration of public investment and support for busineses. "We foresee that this action plan will allow for 0.7% GDP growth in Québec next year and that it will create and maintain some 16 000 jobs", she indicated. $400 million for consumers To bolster consumer confidence, the government is relying on an additional payment of $100 per adult, in December 2001, for all recipients of the QST credit. "We chose this method of reinforcing consumption because a percentage of recipients could not take advantage of the tax cuts announced last spring", Ms. Marois explained. This measure also has the advantage of rapidly injecting funds into the economy. Thus, the government will pay $250 million to some 2.5 million persons. Moreover, the rate of indexation of the personal income tax system, which was to have been 1.8%, will be increased to 2.7% on January 1, 2002–a rise that will have a financial impact of $77 million in favour of taxpayers. Lastly, the government will also index social assistance benefits, by 2.7%, on January 1, 2002–a measure that will benefit 360 000 households, in the amount of $75 million. $3 billion in public investment The second component of the action plan consists in accelerating a number of public-sector investments. "Accelerating these necessary investments serves the dual purpose of meeting various needs of Québec society and of providing direct support for the economy, as well as creating jobs in all regions of Québec", Ms. Marois stressed. The health and education sectors receive a large share of these investments. An additional $500-million budget is granted to the health network, in particular for the construction and renovation of residential and long-term care centres, the refitting of emergency rooms and the purchase of new equipment. For its part, the education network is granted an additional $400-million budget to renovate and upgrade teaching premises, and to build new schools and university buildings. The Minister also announced an injection of $50 million for the construction of early childhood centres. The government is also injecting $400 million for repairs to Québec’s road network and setting aside $350 million for improving the quality of the environment, notably for the treatment of drinking water and wastewater. Nearly $500 million will be invested in the construction and renovation of some 40 000 dwellings throughout Québec. The sum of $100 million is earmarked for information technologies to improve services to the public and streamline administrative procedures. Lastly, over and above the $500 million in additional investments that government corporations have committed to making rapidly, the government will inject another $100 million into infrastructures intended for research, science and technology, as well as another $100 million into cultural facilities. Support for businesses in all regions The third component of the action plan is geared to helping businesses make it through this difficult period and to stimulating investment. To that end, the government is providing immediate assistance to SMEs with less than $15 million in paid-up capital, by granting them an extension of the deadline for remitting their instalments of income tax and tax on capital for the last quarter of 2001. Moreover, beginning on January 1, 2002, businesses whose monthly source deductions do not exceed $1 000 may remit their deductions quarterly. Ms. Marois also announced the creation of a new corporation dedicated to financing SMEs. Called La Financière du Québec, the corporation will have a broader mandate enabling it to grant loans. In particular, La Financière du Québec will be able to provide assistance to businesses experiencing temporary difficulties and fledgling businesses, as well as support tailored to small cooperatives and social economy businesses. Also for the purpose of stimulating private investment, the government will facilitate financing of major projects by improving the FAIRE program and allocating it an additional $150-million envelope this year and an additional $200-million envelope in 2002-2003. Furthermore, the FAIRE program will be extended to 2005, and projects valued at more than $5 million or creating at least 50 jobs will now be eligible. To improve the competitiveness of the corporate tax system, the government will reduce the tax on capital by over 50% by 2007. This reduction will be more rapid for SMEs. As of January 2003, 60% of them will be exempt from paying the tax. Programs targeting the new economy will be extended to 2013, and application of the tax assistance measures for e-commerce businesses will be broadened to include a larger territory. Other measures centre on businesses in the resource regions. Thus, the 10-year tax holiday for manufacturing SMEs in the resource regions will apply from now on to businesses with paid-up capital of less than $30 million, instead of the current $15 million. The refundable tax credit for processing activities in the resource regions has been relaxed, as have the tax credits respecting the Vallée de l’aluminium and the Gaspésie- Îles-de-la-Madeleine region. Lastly, the refundable tax credit for mining exploration activities has been broadened to include the cut-stone sector. Ms. Marois also announced a series of concrete measures to step up personal security that will require an injection of $8 million for the current year and of $35 million in 2002-2003. Finally, Ms. Marois confirmed that the government would maintain a zero deficit. To that end, she tabled a financial framework providing in particular for the upholding of the spending targets specified in the last Budget, that is, an increase of 2.8% in 2001-2002 and of 3.1 % in 2002-2003. - 30 - Source: Nicole Bastien Press Officer Office of the Deputy Prime Minister and Minister of State for the Economy and Finance Tel.: (418) 643-5270 nicole.bastien@finances.gouv.qc.ca Back to press releases menu