The World Forum - July 21st, 2024

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Quebec slashes income taxes in new budget and promises more public spending


The Quebec government is plowing ahead with one of the largest tax cuts in the province's history. 

The tax cut is the big ticket item in the 2023-24 budget, which Finance Minister Eric Girard presented at the National Assembly on Tuesday.

Girard used this budget, the first since the CAQ government was re-elected last fall, to introduce the tax cut and increase government spending while maintaining a promise to balance the budget within five years. 

The tax cut will reduce the lowest two tax rates by one per cent. It's a reduction that will save the average Quebecer hundreds of dollars and will cost the government billions in lost revenue — $9.2 billion worth over five years. 

Tax cuts are often paired with cuts to government spending, but Girard promised there would be no paring back of public services to fund the measure. 

Instead, the tax cuts will be paid for by the government making smaller payments toward the Generations Fund, a debt payment fund. This means the province only expects to meet its debt reduction goal in 15 years, instead of 10.

But the cuts are necessary, Girard said in his speech to lawmakers, because they will stimulate the economy and help address the labour shortage by giving people more incentive to work. 

The cuts were a campaign promise the CAQ made during the 2022 election campaign, where voters delivered the party its second four-year mandate.