www.theglobeandmail.com/s...budget2007
Quebec: $5.7-billion boost in transfers announced
DANIEL LEBLANC
Globe and Mail Update
OTTAWA — The federal government is announcing a $5.7-billion boost in transfers to Quebec over the next two years, unleashing a fierce battle in the province among political parties hoping to capitalize on the bonanza in time for next week's election.
The three leading parties in Quebec – the Quebec Liberal Party, the Parti Québécois and the Action Démocratique du Québec – are all expected to welcome the influx of cash. However, they will also take different approaches in staking their claims to even more funding in the future, and in stating how much more money Quebec deserves out of the federal government.
The three parties will have to contend with Finance Minister Jim Flaherty's assertion that discussions on future transfers to the provinces are “finished.â€
Liberal Leader Jean Charest scheduled the election one week after this federal budget, hoping he would get the credit for the new money and therefore solidify his support. As polls show a three-way race in Quebec, however, the PQ and the ADQ will do their best to state this is not a Liberal victory in any way and that the money belongs to all Quebeckers, regardless of who forms the next government.
Prime Minister Stephen Harper made a splash in the last federal election campaign when he promised to take up Quebec's fight for increased transfers to Ottawa. In that context, the Conservative government is now arguing that the budget ends the provinces' fight to win over a larger portion of the rising federal revenues.
“The long, tiring, unproductive era of bickering between the provincial and federal governments is over,†Mr. Flaherty said in his planned budget speech. “The action taken in Budget 2007 will restore fiscal balance through long-term, fair and predictable transfers.â€
Overall, Ottawa is promising to provide $15.2-billion in transfers to Quebec this year and $16.3-billion next year, up from the current level of transfers of $12.9-billion. It's an increase of $5.7-billion in transfers over two years through rising equalization payments, increased health and social transfers, and new money for the environment, infrastructure and training.
Quebec, which has almost a quarter of the Canadian population, is doing better than the other provinces in this federal budget.
Out of $3.2-billion in new transfers to all of the provinces this year, Quebec gets $919-million. And out of next year's $4-billion in new money, Quebec will get $1.1-billion.
“Quebec pays about 21-per cent of the taxes in the country and it gets a third of the new money in the first year,†said Clément Gignac, the lead economist at the National Bank.
Mr. Gignac explained that the new social spending is being spread out on a per capita basis, but that Quebec scores better than the other provinces because it is favoured by the new equalization formula.
Over the weekend, Mr. Charest took credit for the rising transfers coming to his province, while stating there had to be more to come in the future.
“I don't think it will be the end. I don't expect everything will be solved in one single budget. But I do expect that a chapter will be written, and an important one at that,†Mr. Charest said.
The Bloc Québécois in Ottawa and the PQ on the provincial stage have been calling for an eventual $3.9-billion increase in annual transfers to Quebec.
