Quebec’s Minister of Finance Carlos Leitao says the economy of Quebec has put years of stagnation behind it and is picking up, thanks in part to the resurgence of the US economy. Mr. Leitao’s latest budget projects a fiscal balance for the current fiscal year after six consecutive years of deficits.
“It’s a reasonable forecast because in Quebec’s case, we are a net energy importer. The drop in oil prices has the reverse effect here versus the rest of Canada. Our assumptions are not out to lunch. We are seeing strength in non-energy manufacturing segments, in machine and equipment, aerospace, and beyond that. We are seeing the elements coming together on the need to expand capacity,” said Mr. Leitao.
As Canada’s second-largest province in terms of population, the mainly French-speaking province of Quebec added 57,800 new full-time jobs in the past year, making for a fairly healthy increase of 1.8%.
“The trend is very robust in the pickup in full-time employment,” says Mr. Leitao. “That’s comforting. The other indicator is proprietary data that follows fiscal revenue. Into the first week of May, revenues are on target. If the economy was bad or disastrous, we wouldn’t be seeing revenue grow in line with our expectations.”
Mr. Leitao, who turned to policymaking following a long career as an economic analyst, says Quebec is still tackling the effects of the 2008 financial crisis in the form of weak private-sector investment.
“We tend to think the last recession wasn’t so severe in Canada, especially in central Canada. But export businesses were hit very hard by the recession, and so either they disappeared or others who survived remained overly cautious.”
The minister also backed Quebec’s plan to allow the Caisse de dépôt et placement du Québec pension fund to build and manage public transport infrastructure projects.
“The need is there in Quebec to improve our physical infrastructure,” said Mr. Leitao. “This is not in the context of stimulating economic growth. It has to be done. We are doing our part, spending 88 billion Canadian dollars over 10 years, which is the limit of our fiscal capacity. We can’t go beyond that in terms of adding onto our debt. We needed to find other ways to continue to invest in infrastructure, and that’s why we came up with this idea with the Caisse de dépôt.”
Mr. Leitao also emphasised the importance of struggling aerospace and transportation company Bombardier to Quebec’s economy.