Quebec's finance minister to unveil plan to deal with inflation, housing crisis

Quebec is set to reveal how it plans to support cash-strapped households without spending more money than it can afford.

Tomorrow, the Coalition Avenir Québec (CAQ) government will provide an update on the province's financial situation.

Finance Minister Eric Girard indicated in September that his main priorities would be tackling affordable housing issues and homelessness as well as better positioning Quebec to adapt to climate change.

But he will be trying to solve those problems in a weakening economy.

Quebec's real GDP shrank by 1.9 per cent on an annualized basis in the second quarter.

The economic contraction was due in particular to a decline in investment spending, a slowdown in inventory and a drop in household spending, according to the Institut de la statistique du Québec.

In comparison, the Canadian economy contracted by just 0.2 per cent.

While some economists believe it's too early to say Canada's economy is in recession (the country recorded a $2.082 trillion GDP in August, which was slightly higher than $2.081 trillion in July), early indicators suggest that the economy has not grown significantly since May.

Given the lack of economic growth, tomorrow's announcement might not be as generous as previous updates, warns AppEco director Philippe Gougeon, an economist and former chief of staff to the finance minister.

"Everyone knows there won't be money for everybody. There are no pre-economic-update consultations," he said. "The expectations aren't the same so the government has to put aside money for the budget."

Housing measures

During the update, the government is set to release details on a new fiscal pact with municipalities, a deal it has reached to transfer revenues to allow cities and towns to try to solve problems like climate change, housing and homelessness.

Quebec is also expected to announce the creation of a $250-million fund specifically for affordable housing, according to information obtained by La Presse.

More information is expected on how the $900 million in funding for the acceleration of housing construction will be used within five years following an agreement in principle between Quebec and Ottawa.

The federal government will match that amount for a total of $1.8 billion allocated to Quebec housing. The agreement is part of Ottawa's $4-billion Housing Accelerator Fund, which aims to build 100,000 new housing units across the country.

Those sums for housing come on top of the $15.5 million put toward building shelters for people experiencing homelessness that Lionel Carmant, the minister responsible for social services, announced in September.

Cost of living

Measures to offset the cost of living for those who are struggling the most financially will likely be announced, based on hints from Premier François Legault at the CAQ caucus meeting in September. 

Gisèle Tassé-Goodman, president of the Réseau FADOQ, a Quebec seniors organization, is holding out hope that some of the measures will help put an end to the closure of small, private seniors' residences and support elderly residents with fixed incomes who barely make ends meet.

"The median income of people aged 65 and over is less than $28,000 a year, which is not enough to keep up with the rising cost of living," she said. "It's important not to uproot these people to other private seniors' residences, which are often in bigger cities" and generally more expensive.

The finance minister does not appear to like the idea of issuing additional cheques to Quebecers, as the government did in 2022, saying the CAQ is one of the governments that has already done the most to help alleviate Quebecers' financial burdens.

Cheques ranging from $400 to $600 were issued last year, and income taxes were also lowered. 

Girard has said he doesn't want to contribute to inflation by handing out money and says Quebec's fiscal policy now has to align with the Bank of Canada's interest-rate policy.