This shortfall, all in all relatively small, suggests that the $ 4 billion set aside by the government last June would prove to be quite sufficient to offset the loss of income from a second confinement., says Mia Homsy, President and CEO of the IDQ.
In addition to these funds set aside by Quebec, the fact that losses are also limited in the Canadian province most affected by the pandemic is largely due to the large sums released in recent months by Ottawa to help individuals and businesses. , explains the Institut du Québec.
This significant injection of funds into the Quebec economy means that government revenues are less affected for the current year and should start rising again more quickly., can we read in the report of the IDQ.
By including this variable in the model [l’argent du fédéral], it emerges that the recovery that began in the summer of 2020 and for the year 2021 could prove to be faster and stronger.
According to IDQ analysts, the savings amassed by households during the two confinement periods could ultimately result in a notable increase in consumer spending during deconfinement, which will allow Quebec to limit its losses. tax and taxation revenues.
Moreover, underlines the IDQ, the fact that the new sanitary restrictions are limited this time to catering, accommodation, culture and leisure, companies in other sectors can still continue to operate and generate income. for the state.
Without forgetting the expenses
However, warns the CEO of the IDQ, Mia Homsy, all these simulations do not take into account the revenue losses that affect state corporations, additional government spending on health, education and financial assistance to citizens. and businesses.
To more accurately measure the impact of this crisis on fiscal balances, spending will also have to be taken into account., recalls the CEO.
We have chosen to focus our analysis on the impact of health restrictions on State revenues. Especially since the explosion in health and education spending linked to the health emergency cannot yet be fully quantified., she explains.
Although the results of our models are reassuring about the impact of a second lockdown on the state’s shortfall, underlines Mia Homsy, we will now have to wait to assess whether the news will be as positive on the expenditure side. . Nothing indicates it for the moment.
Quebec finances shaken up
During the economic shock caused by the first wave of COVID-19, last March, the government of Quebec forecast a budget without deficit for 2020.
In June, during a economic update, the Minister of Finance, Eric Girard, deplored a loss of own-source revenue of $ 8.1 billion after the initial shock and an anticipated deficit of nearly $ 15 billion for the current fiscal year.
Also in June, additional spending related to the health crisis was estimated at more than $ 6.3 billion.
To deal with this historically significant crisis in Quebec, Minister Girard announced a provision of $ 4 billion to cover financial risks, additional health costs and economic recovery.
The government’s $ 14.9 billion stabilization reserve was also used to try to maintain a balanced budget.
The Quebec government must once again take stock of public finances on November 12.