Press releases

2002-2003 BUDGET

Priority given to balanced public finances: maintaining a zero deficit

Québec City, November 1, 2001 — While announcing a series of concrete actions aimed at shoring up business and consumer confidence and supporting the economy, Deputy Prime Minister and Minister of State for the Economy and Finance Pauline Marois indicated that maintaining a zero deficit is a priority for the Québec government. "We all know what effort and concessions as a society, as well as how much rigorous management of government spending, went into achieving a balanced budget. I am determined to preserve those achievements in spite of the tougher current situation", the Minister said during the tabling of the 2002-2003 Budget.

Impact of the economic slowdown

The Minister explained that Québec had been impacted by the major slump in the U.S. economy, notably because 86% of Québec’s international exports, which are equivalent to 35% of our GDP, are destined for the U.S. market. "The new economic situation leaves us no choice but to lower our revenue forecasts by $1.8 billion for 2001-2002 and 2002-2003", she said. However, owing to the sharp reduction in interest rates, the government’s debt service costs should be $940 million lower for the same period.

With the aim of balancing public finances while maintaining public services, the Minister presented a fiscal framework that:

• maintains spending for the current year at the level provided for in the last budget;
• increases spending for 2002-2003 by 3.1% over the current year;
• immediately uses the balance of $670 million of the reserve created by the government using last year’s surpluses;
• increases the tobacco tax by $2.50 per carton;
• introduces new measures to curb tax evasion;
• reallocates $281 million in spending.

Support employment without compromising a balanced budget

The Minister also said that the government has decided to accelerate the planned public investments of $3 billion in order to bolster the economy and preserve jobs. "Public investment offers the dual advantage of improving public services, with relatively little impact on government spending in the short term. It is the most appropriate instrument for usefully injecting funds into the economy," the Minister pointed out.

- 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