Quebec Budget 2022–2023 – Budget maintains the course in uncertain times
Montréal, March 22, 2022 – The Quebec CPA Order welcomes, with some reservations, the 2022–2023 Quebec Budget, tabled today by Minister of Finance Eric Girard. “Despite general uncertainty, with this budget the government is maintaining its current course of responsible management of public finances,” said Geneviève Mottard, CPA, CA, President and Chief Executive Officer of the Order, “yet it could have been bolder regarding threats to growth and the fight against climate change.”
Countering threats to growth
The Order is pleased with the announcement of additional measures totalling roughly 2.2 billion dollars—notably to support the digital shift of businesses and encourage investment in new technologies—as well as the extension of the temporary enhancement of the investment and innovation tax credit.
While the $500 amount announced today will temporarily mitigate the impact of the current surge in inflation, it remains a band-aid solution to the consequences of inflation that taxpayers will have to face in the longer term. The Order would have liked to see more of a focus on measures that target structural issues in order to increase the net incomes of low- and middle-income people, for example, an increase to the solidarity tax credit.
Additionally, regarding the labour shortage, given that the government’s forecast of economic growth relies heavily on an increase in productivity and Quebecers’ increased participation in the job market, the Order is surprised by the lack of additional measures to promote the retention of experienced workers.
The Order does salute the commitment of an additional billion dollars to the Plan for a Green Economy from 2022 to 2027, but questions the choice to lower the maximum rebate awarded for the purchase of electric vehicles.
“At a time when Quebec is struggling to reach its 2030 targets for greenhouse gas emissions, it would have been opportune to double down on investment in public transit and green taxation measures that encourage transit electrification,” said Ms. Mottard.
On another note, the Order salutes the government’s willingness to continue implementing the Tax Fairness Action Plan, particularly with regards to measures aiming to increase corporate transparency and those that facilitate citizen compliance with tax obligations and the easing of companies’ administrative obligations.
Budget balancing and governance in public finance
Regarding the return to a balanced budget, the government continues to show prudence in doing so by maintaining the course for the 2027–2028 fiscal year and in continuing to invest in the Generations Fund. This decision is notable mainly in that it will not compromise the government’s ability to adequately finance its essential missions, while also fostering intergenerational equity.
The allocation of 2.5 billion dollars in the 2022–2023 budget to manage the risks associated with the pandemic and the consequences of the invasion of Ukraine by Russia also constitutes a prudent measure that is well received by the Order.
The Order is also delighted with the continued drop in the debt-to-GDP ratio and welcomes the government’s decision to propose changes in next year’s budget to the Act to reduce the debt and establish the Generations Fund, with a view to setting a new mid-term debt-reduction goal to be calculated using the method of net debt, a concept already used by the OECD, the IMF, and several Canadian provinces.
However, the Order would like to reiterate the need to lead a discussion on the management mechanisms of the Generations Fund, particularly regarding risk management as it relates to amounts held and disbursement rules. Lastly, the Order is disappointed to note that the government has still not accepted the recommendations that it has been making for the last several years to improve the transparency and predictability of public finance management, such as the creation of a parliamentary budget officer position and the preparation of long-term economic and fiscal forecasts.
“With the election fast approaching, the implementation of these recommendations would have enabled a more informed democratic debate on the budget choices that will arise in the coming years and have a significant impact on future generations,” concluded Ms. Mottard.
About the Quebec CPA Order
The Ordre des comptables professionnels agréés du Québec has 41,000 members and 5,000 future CPAs, making it the third largest professional order in Quebec. The Order ensures the protection of the public and the visibility of the profession. It represents all areas of expertise of the accounting profession, including financial reporting, management accounting, strategy and governance, audit and assurance, finance and taxation.
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Manager, Government Affairs
Quebec CPA Order
Phone: 514-288-3256, ext. 3024
1 800 363-4688