But upon closer look, we see that it’s more like a poisoned gift. Sooner or later, these tax cuts and reductions will lead to a new period of austerity.

Since the arrival of the Couillard government, tax cuts have been announced with every budget, except for the first one in June 2014. Even if we include rate increases, notably for childcare centres, we arrive at nearly $3 billion less to fund public services. It’s the perfect storm for a new wave of cutbacks.

An insidious problem

The most recent period of austerity was the result of $6 billion in tax cuts and tax changes authorized by the Bouchard and Charest governments since the late 1990s.

Although these cuts weakened Québec’s public finances, the reality was hidden behind the vigorous economy experienced from 2000 to 2008. But the 2008 financial crisis changed everything. Québec fell into a deficit and liberal austerity set in in 2010, reaching unseen levels at the start of the Couillard government.

A well-oiled strategy          

With nearly $3 billion in tax reductions and cuts since balancing the budget in 2015-2016, we’ve entered a new cycle of state disengagement. During a time of full economic growth, the government already needs to dig into its surpluses to balance its budget.

And this doesn’t include the increase in contributions to the Generations Fund, which in 2020-2021 will deprive the state of $3.5 billion in additional resources to finance its objectives.

Without a doubt, the tax reductions introduced by the Couillard government three years ago will soon result in a new round of cutbacks.

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