No deficit, promises Quebec finance minister

Quebec's finance minister has released a pre-election economic update she said will allow the Liberals to govern the province over the next few years without posting a deficit.

'There won't be a recession [in Quebec]. There's growth, but it's going to be mild.' —Finance minister Monique Jérôme-Forget

Monique Jérôme-Forget's update opens the door for Premier Jean Charest to call a snap election this week and launch a campaign expected to focus on who is best positioned to guide the province through the current economic crisis.

The Quebec government has a $2.3 billion reserve that will guarantee balanced budgets in 2008-2009, and 2009-2010, Jérôme-Forget said.

She also announced measures worth $249 million to limit the impact of the credit crisis, and promised new tax benefits for retired and low-income Quebecers as of January.

Jérôme-Forget says Quebecers will benefit from several years of prudent fiscal management under a Liberal government, which is now prepared to weather the economic slowdown.

 "Quebec is in a very good position to go through the recession that is being experienced south of the border," Jérôme-Forget said Tuesday.

"Because we planned to have this [road] infrastructure program. Because we promoted investment. Because we reduced taxes, because we cut the capital tax on the manufacturing sector … we will go through this situation in a very positive fashion," she said.

Growth projections for Quebec's economy are downgraded slightly to 0.8 per cent from 1.5 per cent this year, and to 0.6 per cent from two per cent next year.

Jérôme-Forget, who is also president of Quebec's treasury board, called the forecast "very modest" but insisted "there is going to be growth."

"There won't be a recession [in Quebec]. There's growth, but it's going to be mild."

Quebec needs a "rigorous approach" to steer its economy through the next few years, she said.

Jérôme-Forget's economic statement will be the Liberals' main electoral plank in a campaign expected to be launched Wednesday.

If that happens Quebec voters will go to the polls Dec. 8,  less than 19 months after electing the Liberals.

Charest will be campaigning as the best leader Quebec has to choose in tough economic times. The Liberal leader will seek a majority government after leading a minority at the national assembly since March 2007.

An 'embellished picture': Opposition

Opposition leaders questioned Jérôme-Forget's confidence about the economy, with ADQ finance critic Gilles Taillon calling her update an "embellished picture."

"We have a situation in which Quebec is in deficit," he said in French. "It's a deficit that is growing. The reserves the minister refers to should be used to pay down the deficit."

While the Liberals maintain they are balancing the budget — as required by Quebec law — the ADQ claims Quebec's last budget was not balanced because the Liberals were forced to dip into  their "rainy day" reserves fund to come out even.

"There's some window-dressing when it comes to [public] debt," he added. "When we want to have sound accounting, we should bring down our debt to zero."