As the cost of living jumps, should the Quebec budget give taxpayers money back to help?


As inflation rises and Quebecers tighten their belts, many are calling for the government to intervene. But experts say the government should think twice before handing out cheques.

Food prices jumped six and half per cent in January 2022, the biggest increase in more than a decade, according to Statistics Canada.(Nathan Denette/The Canadian Press)

Things haven't been easy at the Union United Church's food bank.

Charlene Hunte, who runs the bank in Montreal's Little Burgundy neighbourhood, said demand for groceries is still high, but it's becoming harder and harder to fill the shelves. Everything is more expensive than it used to be — from the food they buy to the gas they have to use to go get it.

A program that delivered groceries to seniors and others confined to their homes was recently cancelled, because the food bank couldn't afford to run it anymore.

"It was just too much for us," Hunte said. "A lot of us were taking money out of our own pocket."

Hunte, who is retired and on a fixed income, said she's spent at least $1,000 of her own money to keep the bank going. Others, she said, have spent four or five times more than that.

"It's very hard," Hunte lamented. "But we have no choice but to make sure that the next week, the clients get their food, because they're depending on it."

When she looks at the price of groceries and gas, Hunte said it's "unreal what's happening."

With the Quebec budget set to be released Tuesday, she said she knows what she's hoping for.

"We should get a tax break or something. It just affects everybody," she said. "We pay a lot of taxes in Quebec, and I don't see where my money's gone."

With inflation on the increase and Quebecers tightening their belts, many people have been calling on the government to intervene. Suggestions include freezing Hydro-Québec rates or reducing the provincial gas tax.

But those who watch the province's economy said the government should think twice before handing out cheques.

Quebec Finance Minister Eric Girard, left, receives a high-five from Quebec Premier François Legault after he presented his 2021 budget in the legislature last year.(Jacques Boissinot/The Canadian Press)

Making matters worse

Moshe Lander, a senior lecturer in economics at Concordia University, said the Quebec government doesn't have much power to control inflation. The best it can do is try to mitigate its effects on the population.

"[The government] can provide income support to those that are most affected," such as people in low-income households or on a fixed income, said Lander.

"Usually, the items that go up most — the gasoline, rent — are, for low-income people, the vast majority of their budget."

The problem, Lander said, is that by giving money to the population to spend, the government would be contributing to the inflation problem — not stopping it.

To try to keep the rate of inflation as low as possible, Lander said the government should "put away the cheque book" and wait for the Bank of Canada to address inflation by tweaking the interest rate.


Meanwhile, he said the government should "run surpluses for the next three years, five years, 10 years, whatever," and hold onto the revenue for the next crisis — be it a housing crash or another wave of the COVID-19 pandemic.

"But for any government to say: 'I know what economic textbooks say, and they say to put our hands in our pockets and wait' — well, that's not going to win you elections," he said. "People expect that the correct answer is to do something."

'A lot of pressure' on CAQ government

The budget on Tuesday will be the Coalition Avenir Québec government's last one before this fall's provincial election.

Mia Homsy, director of the public policy think tank, the Institut du Québec, said the looming election is probably going to push the government to spend.

"There's a lot of pressure. People are complaining more and more about the impact of higher cost of energy, food and other things," she said. "I'm expecting cheques for everybody."

But Homsy agrees that it's not what the government should be doing. While Quebec's finances are much better than they were after the 2008 recession, for example, she said there are "huge challenges" for the province on the horizon.

Quebec Finance Minister Eric Girard said last November that the province's post-pandemic deficit was expected to be $6.8 billion for this fiscal year, about $5.4 billion less than forecast last March.(Jacques Boissinot/The Canadian Press)

Quebec's growth is expected to falter in the years to come, she explained, partly due to an aging population that will need significant investments in health and long-term care.

The government also has to pay down the province's debt. passed in 2006, mandated that the government's gross debt must not exceed 45 per cent of the province's GDP by the 2025-2026 fiscal year.

"We have the ability now to spend the money, to decide what we want to do as a society," she said.

"But we have a lot of challenges, so let's not waste our money on sending big cheques to everybody before the election."

In the meantime, Charlene Hunte, of the food bank, said the government needs to remember what it's like for those struggling.

"Send a representative to sit down, to see how the community is running and how people are being left starving on the street," she said. "If you're not in the streets, you don't know."

She said people are trying, but without any money, there's only so much someone can do to put food on the table — or in the food bank.

"But we have no choice but to go forward and just try to do our best," she said.

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