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I. Outstanding economic and financial results
(a) An economy resolutely turned toward the 21st century
I have often spoken of the Québec paradox: we have everything we need to do as well as and even better than anyone else, yet our performance has not always lived up to our expectations. Today, I have the clear impression that this paradox is unravelling and that the recent growth in our economy is leading us farther and farther away from the paradoxical toward the simply normal.
In fact, Québec, which recorded strong growth in 1997 and 1998 experienced even more impressive growth in 1999.
- At 3.7%, economic growth outstripped the most optimistic forecasts.
- 76 000 jobs were created in 1999. For the second consecutive year, we achieved a level unsurpassed since 1987.
- Last December, the unemployment rate dropped to 8.1%, its lowest level since the 1976 Olympic Games.
- This growth was particularly good for young people. In 1999, 28 000 jobs were created for young people between the ages of 15 and 24, an achievement not seen since 1973. Young people obtained 37% of all jobs created, although they represent only 16% of the population. These young people who envied us the golden days of our own youth, those thirty glorious post-war years, now have a window on something better in the guise of the global economy and, for many of them, the knowledge-based economy.
- This economic growth provided solid underpinning for our fight against poverty; in twelve months, the number of persons depending on income security benefits dropped by 40 000; the total decrease since 1996 actually amounts to 200 000 people. The best basis for our fight against exclusion is prosperity: the rest is up to our tradition of solidarity. The market economy alone is not enough. That is why initiatives such as the Fonds de lutte contre la pauvreté are so important.
- The Montréal metropolitan region is more buoyant than ever. At the end of 1999, the unemployment rate was not only lower than the Québec average, but also lower than the Canadian average for the first time since 1984. Ten years ago, the unemployment rate was 4% in Toronto and 9.6% in Montréal. At the end of 1999, it had risen to 5.3% in Toronto and dropped to 6.7% in Montréal. The gap was four times smaller than it had been. And it is still shrinking.
The outlook for the year 2000 is promising in the United States, in Europe and in Asia, which is recovering from the 1997-1998 crisis. Unless all the experts are wrong, the expansion of the world economy will support our continued growth again this year. We therefore expect our gross domestic product to increase by 3.3%, which is comparable with last year's results and twice as high as the average for the past ten years.
Once again, job creation should be vigorous: in fact, we expect 70 000 new jobs, which should reduce the year's average unemployment rate by another 1%.
This highly favourable economic outlook makes it possible to table a Budget today that includes measures that reflect the priorities of our fellow citizens and that will certainly be greeted with immense satisfaction.
(b) Putting budgetary surpluses to work for Quebecers
On the financial front, our success is clear and acknowledged by all.
We balanced the books a year ahead of time, in 1998-1999. And we have done it again: a balanced budget twice in a row.
The remarkable performance of the economy in 1999, which I was hoping for with all my heart but which it would have been imprudent to incorporate fully in my forecasts, has resulted in budgetary spin-offs that now truly resemble the green valleys I once invoked. Recently, I received confirmation that a $2-billion surplus became available during fiscal 1999-2000.
The economic growth forecast for 2000 should also give rise to substantial budgetary surpluses. The budget plan I am proposing to this Assembly consists in reinvesting these surpluses in accordance with the wishes of our people. Our surpluses, then, will not be earmarked for debt reduction but for rapid tax cuts, for health care, for education, for young people and for the economy. Note that, even with a flourishing economy, what I am proposing today would not have been possible in the financial and administrative mess of the past. Remember: we had an annual deficit of $6 billion, whereas we have a substantial surplus today. Which goes to show you how far we have come.
These billions being returned today to meet the needs of the people will not prevent our government from continuing with the financial rigor agreed upon at the Québec Summit of 1996 and strictly adhered to ever since. Accordingly, I am announcing for 2000-2001 the third balanced budget in Québec's recent history.
The fiscal and other measures announced today are not being paid for with money borrowed in New York, London or anywhere else. Québec's taxpayers will have the honour of paying for everything, including the investments, with their own money. For our young people, this will offset a part of the debt of the past, since we are now paying the depreciation of durable assets in cash.
SUMMARY OF CONSOLIDATED FINANCIAL TRANSACTIONS (1)
(in millions of dollars)
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1998-1999 |
1999-2000 |
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| Actual results |
Budget Speech 1999-03-09 |
Preliminary results |
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Budgetary transactions |
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Own-source revenue |
38 560 | 38 264 | 40 677 | ||
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Government of Canada transfers |
8 090 | 6 908 | 6 284 | ||
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Total revenue |
46 650 | 45 172 | 46 961 | ||
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Operating expenditure |
- 39 332 | - 37 573 | - 39 573 | ||
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Debt service |
- 7 187 | - 7 599 | - 7 388 | ||
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Total expenditure |
- 46 519 | - 45 172 | - 46 961 | ||
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Budgetary surplus (deficit) |
131 | 0 | 0 | ||
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Non-budgetary transactions |
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Investments, loans and advances |
- 1 402 | - 1 258 | - 1 755 | ||
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Capital expenditures |
- 217 | - 300 | - 372 | ||
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Retirement plans |
1 020 | 1 440 | 1 629 | ||
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Other accounts |
991 | 358 | 958 | ||
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Non-budgetary surplus |
392 | 240 | 460 | ||
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Net financial surpluses (requirements) |
523 | 240 | 460 | ||
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Financing transactions |
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Change in cash position (2) |
- 1 983 | 2 627 | 2 182 | ||
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Change in direct debt (2) |
2 490 | - 1 740 | 184 | ||
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Retirement plans sinking fund |
- 1 030 | - 1 127 | - 2 826 | ||
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Total financing of transactions |
- 523 | - 240 | - 460 | ||
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N.B.: A negative entry indicates a financial requirement
and a positive entry, a source of financing. For the change in cash position,
a negative entry indicates an increase and a positive entry, a decrease.
1 According to the budgetary structure in effect in 2000-2001.
2 Preliminary results for 1999-2000 take into consideration
advance borrowings of $758 million made in 1999-2000.
SUMMARY OF CONSOLIDATED FINANCIAL TRANSACTIONS (1)
2000-2001 FORECASTS
(in millions of dollars)
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Budgetary transactions |
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Revenue |
48 253 |
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Expenditure |
- 48 253 |
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Budgetary surplus (deficit) |
0 |
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Non-budgetary transactions |
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Investments, loans and advances |
- 871 |
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Capital expenditures |
- 435 |
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Retirement plans |
1 726 |
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Other accounts |
- 894 |
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Non-budgetary surplus |
- 474 |
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Net financial surpluses (requirements) |
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- Consolidated Revenue Fund |
0 |
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- Consolidated organizations |
- 474 |
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| - 474 | |
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Financing transactions |
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Change in cash position |
1 160 |
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Change in direct debt |
1 191 |
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Retirement plans sinking fund |
- 1 877 |
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Total financing of transactions |
474 |
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N.B.: A negative entry indicates a financial requirement
and a positive entry, a source of financing. For the change in cash position,
a negative entry indicates an increase and a positive entry, a decrease.
1 According to the budgetary structure in effect in 2000-2001.