2023-06-07 17:30:49
Even if inflation continues to affect portfolios and interest rates continue to rise, Quebec does not intend to provide additional financial assistance to Quebec families, confirms Minister Eric Girard.
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• Read also: The Bank of Canada raises its key rate
“The answer is no,” confirmed Finance Minister Eric Girard.
“The reason we offered help last year was because the tax system was indexed at 2.6% and inflation reached 6.5%. There, the tax system is indexed by 6.5% in 2023 and we expect 3.5%. So there will be no additional help.”
In its most recent budget, the government has fulfilled its election commitment to lower taxes for 4.6 million Quebec taxpayers as of the 2023 tax year.
Citizens who earn $30,000 per year will benefit from a reduction of $108 in their tax burden. A sum that will reach $814 for the wealthiest with an annual income of $100,000 or more.
In November 2022, the Legault government also paid checks of $400 to $600 to counter inflation.
Rate increase
This morning, the Bank of Canada announced an increase in its key rate by a quarter of a percentage point, taking it from 4.50% to 4.75%.
“It is certain that a rate increase impacts all those who have debt, whether mortgage, business working capital. And that will temper demand, bring down the job market and temper wage increases, ”argued the Minister of Finance.
“Essentially, the Bank confirms what we knew. That is to say, the first quarter in Canada was much stronger than expected and the job market continues to impress.”
According to the Minister, the concern of the financial sector is at the level of the price of services and the impact on wages. “As the job market is tight, wages remain high in Canada, in Quebec and this puts pressure on what is called the fundamental index of inflation, excluding food and energy. Food and energy go down.”
Recession: 50/50
Again, the minister estimates that the chances of plunging into a recession are 50%.
“It’s still the same, the forecast of weakness… The slowdown, it’s concentrated in the second, third and fourth quarters of 2023. The forecast is around 0.0% for those three quarters. Which means that there is as much chance of being above as below 0%. It’s always 50% chance. It is certain that we continually postpone the start of the recession, ”he explained.
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