Provincial government introduces radical measures in 2010-11 budget
Quebec’s 2010-2011 budget was released last Tuesday, including an announcement that the province’s tuition fees would unfreeze in two years.
The budget outlines a plan to reduce spending on government programs by $6.9-million and increase taxes and fees by $4.3-million.
These extreme measures are designed to ensure a balanced budget by 2013-14.
Quebec’s debt currently sits at $160 billion, or 53% of GDP. This year’s budget deficit will add $.4.2 billion to the debt.
Some critics are calling the new taxes “regressive,” claiming that they will disproportionately affect low-income individuals, who are less able to adjust to the additional costs.
Of interest to students was the introduction of an initiative to unfreeze tuition fees at the province’s universities by 2012.
This is bad news for future students, but good news for the province’s post-secondary administrators, who have frequently claimed that their institutions are under-funded.
Quebec’s average undergraduate tuition fee of $2,272 is currently the lowest in Canada.
Prior to this budget, tuition fees were legislated to rise by $50 every semester; the size of the recently announced increase has yet to be determined.
Tuesday’s budget excluded a proposal put forth by former premier Lucien Bouchard (who also advocated the tuition hike) to introduce a differentiated fee initiative, under which students would be charged different amounts depending on the perceived economic viability of their program.
Other initiatives were introduced, such as a further 1% increase in the Quebec Sales Tax to be introduced in 2012; this is in addition to an increase scheduled for January 1, 2011.
A new health ‘contribution’ was introduced – essentially a yearly fee starting at $25 in 2010, progressing to $100 dollars in 2011, and reaching $200 in 2012. This source of revenue will contribute to funding current health care costs, and helping to pay down the deficit.
A proposition to charge individuals a user fee each time they visit a doctor was introduced, but not finalized. The proposed fee would be $25 per visit, up to a maximum of 1% of taxable earnings per year.
The provincial government may run into difficulty with this, because it seems to violate the spirit of the Health Canada Act – “to facilitate reasonable access to health services without financial or other barriers.”
By making to fee a tax ‘deductible,’ rather than a direct payment from patient to doctor, Quebec avoids any explicit legal conflict with the Canada Health Act. The federal government has not yet staked out its position on this issue.
The cost of energy will rise as a result of this budget. A fuel tax increase is scheduled for the cities of Montreal and Quebec; as well, an increase in electricity prices will be phased in between 2014 and 2018.
This budget will increase taxes and other costs of living in a province that already has a higher tax rate than most other provinces. The budget is being called “courageous” by its supporters, as it will demand sacrifices to achieve eventual fiscal solvency.
However, most of the new budget-balancing measures will not be implemented until some time in the future.
