For the most part, Finance Minister Raymond Bachand did what he had to do and the best he could do with his provincial budget for the coming fiscal year.
For most Quebecers, it will come as something of a relief in that it contained no new tax increases and no major cuts to social programs. What pain there is in the new budget is mild compared with last year's version, which laid on new gasoline taxes, jacked up hydro rates, hiked the sales tax and imposed an escalating dedicated health-care tax. (Though some of those measures announced last year, such as increases in the sales, fuel and health taxes, will come into effect this year and next.)
Unlike last year's as well, this year's budget was short on surprises. Things for which Quebecers will have to dig deeper into their pockets - university tuition and pension contributions - were amply telegraphed in advance of the budget's delivery. In both these cases the government essentially did what it had to do.
Students will, of course, howl about the $325 annual university tuition-fee hike that will be applied for five years starting in the fall of next year. It is possible that it will discourage some from low-income backgrounds from attending university, but the government has made provision to alleviate that by beefing up the student bursary program.
It's true that the increase will nearly double the current tuition cost for students, but then the increased revenue is something universities desperately need to maintain academic standards. Furthermore, it will leave Quebec's tuition fees still below the Canadian average, and roughly the same in current dollar value as it was 40 years ago. As for discouraging attendance, Quebec's cheap tuition did not produce commensurately higher attendance rates than in provinces with higher fees.
Something also had to be done about pensions, given the impending avalanche of babyboomer retirees and the fact that at current contribution rates the provincial pension plan was facing bankruptcy by 2040. The budget's imposition of a 0.15-per-cent annual contribution increase for the six coming years is hardly crippling, amounting to just short of $170 a year by the time the hike is fully implemented for people earning $40,000 a year.
Also commendable is the measure to discourage early retirement by penalizing those who opt to retire before age 65 and rewarding those who work longer. The early-retirement penalty will be raised to 0.6 per cent monthly from 0.5 per cent, and the bonus for those who keep working until age 70 is raised from 0.5 per cent to 0.7 per cent. And starting next year, workers over 65 can get a tax credit of up to $1,504 a year.
Such encouragement to keep working was particularly necessary in a province where close to two-thirds of the working population retires at age 60 and where the average retirement age is two years lower than in the rest of the country.
Other things thing that begged to be done were boosting royalties for shale-gas extraction, should such development be deemed possible without risking public health and the environment, and increasing the number of subsidized daycare spaces by 15,000 over the next five years.
The worrisome part of this year's budget is that the government doesn't yet seem to have a handle on its spending. Bachand maintained that the administration is still on track to achieve a balanced budget by the 2013-14 fiscal year, but serious doubts about that are raised by the fact that instead of holding the line on spending - or better, reducing it - expenditures will grow by 3.7 per cent from 3.1 per cent.
A nation that controls its finances controls its destiny, Bachand said. Given this lack of spending control, Quebec's destiny appears uncertain.