Press Release No. 1

2004-2005 Budget Speech
A budget of change

“I am tabling today a budget of change, a budget that lays down guidelines, affirms values and directs our actions.”

Québec, March 30, 2004 – “I am presenting today a budget of change, a budget that honours our commitments and puts money back into the pockets of Québec families.” So began the 2004-2005 Budget Speech delivered before the National Assembly by the Minister of Finance, Yves Séguin.

Inspired by liberal values, the 2004-2005 Budget delivers on the government’s promises. It:

• gives priority to health and education;
• gives $1 billion back to taxpayers;
• helps families, people with low incomes and the middle class;
• makes an unprecedented effort to value work and combat poverty;
• provides support for economic development, particularly in the regions.

1. Giving priority to health and education

Our No. 1 priority: accessible, quality services for a healthier Québec

In keeping with the commitments made by the government, the Minister of Finance announced that $1 billion would be added to the health budget, bringing it to $20.1 billion in 2004-2005, an increase of 5.1%. The government will have invested $2.2 billion in health care since April 14, 2003.

To respond to Quebecers’ health needs, the 2004-2005 Budget Speech affirms the importance of taking action with regard to both the organization and funding of our health-care system.

Building on education and culture

In the education sector, the government’s action focuses on increasing the student success rate. In 2004-2005, an extra $309 million will be allocated to education, increasing that budget to $11.8 billion.

The 2004-2005 Budget Speech also provides support for Québec creators, notably by improving the tax system in their regard.

2. Acting responsibly

Reducing the tax burden by $1 billion

The 2004-2005 Budget puts $1 billion back into the pockets of Québec taxpayers.

As a first step, priority is being given to those most in need, namely, families and low-income workers.

The income tax reduction breaks down as follows:

• $550 million through the Child Assistance measure;
• $240 million in the form of a work premium;
• $220 million available to taxpayers through the simplification of the tax system.

Realizing Québec's full economic potential

A new economic strategy aimed primarily at SMEs and the regions will be released soon. The budget lays the groundwork for this strategy:

• support for private investment and SMEs;
• promoting of regional autonomy and development through the creation of a $300-million regional economic intervention fund (FIER) and concrete assistance to the resource regions.

Combating poverty and social exclusion

In order to respect the government’s commitments under the Act to combat poverty and social exclusion, the 2004-2005 Budget allocates $2.5 billion over five years to the Child Assistance measure, the Work Premium, social housing measures and the other measures contained in the action plan to combat poverty to be tabled this week by the Minister of Employment, Social Solidarity and Family Welfare.

The Minister of Finance announced a series of measures to help Quebecers affected by the housing shortage. An additional $256 million is earmarked to build 16 000 new low or affordable rental units, $39 million to enhance the Residential Adaptation Assistance Program for people with disabilities, and extra money to mitigate the impact of the housing shortage.

The 2004-2005 Budget takes steps to ensure that, as of May 1, anyone who receives a cheque from the Québec government for $1 500 or less will be able to cash it at any branch of the eight principal financial institutions operating in Québec.

“Combined with the other measures that will comprise the action plan to combat poverty, the measures I am announcing represent an unprecedented collective effort. A total of $2.5 billion over five years will be allocated by the government to break the circle of poverty and social exclusion. This major investment will make it possible to build a society in which all citizens have a roof over their heads, better assistance for their children and greater recognition of their work effort,” the Minister said.

A balanced budget

Today’s budget maintains a zero deficit. The budgetary situation for 2004-2005 will nonetheless remain fragile, even if there are encouraging signs in the Québec economy and forecast growth of 2.7% in 2004. Government program spending will total $47 151 million in 2004-2005, an increase of only 2.9%.

The 2004-2005 Budget also anticipates an increase in the profits of government corporations, primarily through the sale of certain assets, which will generate $880 million in revenue.

The Minister of Finance said that the government must also be rigorous in its management of the debt. Two types of initiatives are planned to further slow the increase in the debt. First, the government will continue to make minimal investments in government corporations. Second, it will adopt a new capital-spending policy based on its ability to pay and geared to more rigorously determining the investments required to maintain our infrastructures in good condition.

“In less than a year, our government has begun laying the foundations for a renewed Québec. We intend to continue that work. We made commitments to Quebecers and we are keeping our word. This budget clearly shows the strength of our pledges regarding health, education, families, work incentives, assistance for the regions and economic development. It also aims for greater tax fairness by providing for a better sharing of the tax burden,” said the Minister in closing.

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