With markets reeling, can Quebec's budget offset uncertainty? Yes, says Legault

The 2020-21 budget was tabled on March 10. Read our latest story here: Quebec government tries to go green in new budget, pushing public transit and electric cars

One day after global markets cratered, Quebec's finance minister will table his government's annual budget, hoping the spending plan he finished three weeks ago is still relevant in the face of growing economic insecurity.

Eric Girard took part Monday in the traditional pre-budget day spectacle that sees the finance minister buy a new pair of shoes. 

Girard opted instead for new blades on an old pair of hockey skates. It symbolized, he said, Quebec's desire to catch up to Ontario's economy and the environmental focus of Tuesday's budget (recycling, get it?). 

But as Girard was engaging in heavy-handed symbolism, the Toronto Stock Exchange, along with markets around the world, were undergoing one of their most dramatic sell-offs in recent history. 

Investors, already nervous about the economics effects of the coronavirus outbreak, panicked at news that Saudi Arabia was removing production caps on oil, sending the price of crude tumbling more than 25 per cent.

Girard said Quebec's budget, which will be tabled Tuesday afternoon in the National Assembly, was finalized last month, and doesn't contain any specific measures to deal with a slowdown triggered by the virus. 

The government's finances, he said, are already well-equipped to handle an economic emergency.

"The Quebec economy's going to be resilient in the face of these challenges," said Girard. 

"The budget is a structural plan to improve the competitiveness of businesses, to help the economy reach its full potential, to invest in services, health care and education. We're doing that."

Quebec ready to stimulate economy: Legault

Quebec is expected to have a surplus of between $1.5 and $2 billion heading into the coming financial year. Girard said the extra money could help alleviate any economic strain global uncertainty puts on the province's economy. 

"If private demand is weak and we need to support it with more public spending, we have the capabilities to do that in due time," said Girard.

While Girard was otherwise tight-lipped about what his budget will contain, Premier François Legault suggested there would be enough new infrastructure funding to compensate for slower economic growth. 

"In the budget, we planned significant expenses for the operations of larger ministries. We also planned for significant expenses in infrastructure," Legault said.

"I think the government has to make an effort to stimulate the economy in this period of economic uncertainty."

Quebec has stabilization reserve of between $13 and $14 billion in case of economic emergencies. Legault said he would consider tapping into it if things get worse.

Consider a contingency fund: Liberals

The Liberal finance critic, Carlos Leitão, called on the government to develop a special contingency fund of $1 billion to contain the spread of COVID-19 in Quebec. 

"Public health should not be constrained by any sort of financial constraint. If public health needs 'X' millions of dollars to create special clinics or special tests, or whatever it is, they should have all the funds that they need," Leitão said. 

"This is not an issue that should be prone to partisan politics." 

Leitão said the $1 billion contingency fund he is calling for would also help protect the government in case of a supply shock effect, such as a collapse in oil prices.

But Girard said it was too late to include a dedicated fund in his budget: "The numbers were finalized three weeks ago, so last-minute ideas or interesting suggestions are not applicable at this point."