When Quebec Finance Minister Eric Girard said “the next six months would be very difficult,” the statement was as much a warning to his party as it was to Quebecers.
The fall economic update or mini-budget has traditionally been an opportunity for governments to drive home their narrative and gain voters’ favour.
But the slowing economy underlines the Coalition Avenir Québec (CAQ)’s shortsightedness in redressing the housing crisis and climate change — both longstanding issues — which could hurt the government’s popularity in the months to come.
First, Quebecers will have to cope with a CAQ government that isn’t spending nearly as much as what they’re used to.
The pandemic pushed the CAQ government to make significant expenditures, which left the province in a deficit position but won François Legault’s government points with voters, who provided the CAQ with a sweeping victory and a second consecutive term.
Now, the province’s economy is in a slump, with Quebec projecting 0.6 per cent economic growth in 2023. This year’s deficit is expected to be $3 billion — up from the $1.67 billion forecast in the spring budget.
The government will also be using two-thirds of its contingency fund for measures addressing unforeseen events like forest fires.
Girard even pointed to Quebec’s months-long negotiations with public sector unions as one of the reasons the government has few buffers left, sending a clear message of financial caution to the 400,000 public sector workers using strikes to seek wage increases that would keep up with inflation rates.
Philippe Gougeon, the AppEco director and former chief of staff to Girard, says that the modest economic update, which offers no new measures to tackle inflation, helps keep the province on track to balance the budget but may cost the CAQ political points.
“It’s patching holes,” he said. “It just goes to show what a small update it is with few resources.”
Reactive measures for housing crisis, climate change
Despite Legault telling reporters the day of the update that Quebecers being able to afford housing is “most important,” the funds announced won’t 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 units for homeless people in the province. To put that in perspective, the Canada Mortgage and Housing Corporation estimates that Quebec needs to build more than 800,000 units by 2030 to solve the affordability problems.
Quebec’s plan is to put part of the new money into an existing program, the province’s affordable housing program (PHAQ), which housing advocates say will make it difficult for non-profits to present projects.
“There’s a lot of problems with that program,” says Amy Darwish, co-ordinator of the Comité d’action de Parc-Extension. “It’s very much geared more toward the private sector. A lot of non-for-profit groups will have to compete with the private sector for that funding.”
“New funding for social housing is good news, but what’s being proposed is a drop in the bucket compared to what’s needed,” Darwish added.
Maryane Daigle, a community organizer for the Réseau d’aide aux personnes seules et itinérantes de Montréal (RAPSIM), underscores that the announcement focuses solely on buildings, when people experiencing homelessness often need social support as well.
That’s why she says funding for social support services should go hand in hand with announcements about new housing units.
The government’s approach is short-sighted, advocates say, because the affordable housing units being promised will not necessarily stay affordable after the government program lapses.
The government’s tendency to apply Band-Aid solutions, like millions for homeless shelters, demonstrates that the CAQ “absolutely doesn’t take the housing crisis seriously,” RAPSIM’s Daigle added.
As for the environment, the mini-budget contained almost a billion dollars for matters related to climate change. But a breakdown of the amount shows that 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 tended to see so far is a sort of patchwork effort trying to address major risks like forest fires or flooding,” said Amy Lesnikowski, head of the climate adaptation lab at Concordia University. “We need to be more strategic about how we approach adaptation in Quebec.”
As the government tries to address the housing crisis and climate change, it is doing so at the same time it is attempting two other colossal tasks: overhauling Quebec’s overburdened public health-care system and reorganizing the education system.
But there are other balls 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 byelection loss in Quebec City, despite long-awaited feasibility studies advising against it.
That — and the government’s recent decision to hike tuition fees for university students coming from other Canadian provinces or abroad — has fuelled concern about how the premier chooses priorities.
The latest polling from Leger shows the gap between the CAQ — at 30 per cent of voter intentions — and the Parti Québécois (PQ) — at 26 per cent — is narrowing. Voter satisfaction with the CAQ dropped eight percentage points, from 48 per cent to 40, in just over a month. And the leader of the PQ, Paul St-Pierre Plamondon, who currently heads a caucus of four, has edged ahead of Legault as Quebecers’ first choice for premier.
Most of the measures laid out in Girard’s mini-budget will take at least five years to unfold, meaning Quebecers will only begin to feel their impact until after the next provincial election in 2026.
Experts will be looking for Girard to show signs of a longer-term vision to tackle pressing societal issues in his spring budget, expected in March.