The PQ’s proposal is based on a series of assumptions that can only be described as an excess of optimism: the Year One Budget assumes that Quebec will: inherit an exaggeratedly reduced share of the Canadian debt; obtain the best rates on global markets; and be successful in concluding advantageous free-trade agreements.
The PQ cuts corners. It under-estimates costs while it over-estimates revenues. By ignoring its fair share of federal debt servicing, the PQ excludes annual expenditures of over $11 billion, making its budget year unreliable.
In the first four years of an independent Quebec, the PQ budget predicts 3.5% growth in government income – a figure that outperforms all credible estimates from renowned financial sector experts. This optimistic revenue increase would be difficult to achieve in the current context in which the first two quarters of 2023 are below the most cautious economic forecasts. As Pauline Marois pointed out in 2005, a period of turbulence lasting several years should be expected in the aftermath of a referendum.
In terms of debt, the Parti Québécois hypothesizes that a sovereign Quebec would be responsible for around 19% of the federal debt, far less than its demographic weight. This debt transfer would have to be negotiated and would most likely be significantly greater.
Furthermore, the fiscal year remains in deficit over the entire period covered by the Year One budget. The PQ anticipates that cumulative annual deficits would add $37.5 billion to Quebec’s debt over the next five years. While a budget deficit is not uncommon for a state, it would have harmful effects and affect service delivery to Quebecers, especially given our already high debt-to-GDP ratio.
Financially, Canada offers great economic stability. Despite the deficits accumulated under the Trudeau government, the country has maintained its credibility in the financial markets. In contrast, it is worth noting that Quebec was on the verge of financial catastrophe after only 18 months of PQ government in 2012-2014, with deficits of approximately $3 billion.
As an integral part of Canada, Quebec benefits from the economic and political weight of 40 million citizens when negotiating international free trade agreements. On the very first day of Quebec’s separation, we would be forced to start these negotiations all over again, with unpredictable outcomes that could work against us.
Canada is part of our history. It represents an important part of who we are. As Liberals, we will always work to help federalism evolve in the best interests of the Quebec nation.
Within Canada, Quebec can already make the choices that will shape its future as a nation. We benefit from Canada’s economic strength, which ranks among the world’s most advanced and secure nations in the world, particularly in terms of safeguarding fundamental rights, individual freedoms, and promoting innovation.
Over the next few days, we’ll be taking an in-depth look at the data and so-called opportunities presented by the PQ. We’ll be asking critical questions about this societal choice – one which we consider to be legitimate but not desirable.
While theoretically sound, this exercise remains deeply disconnected from Quebecers’ current and pressing concerns. Inflation is hitting families hard, and young people can no longer hope to purchase their own home. For the Quebec Liberal Party, the number of Canadian dollars in Quebecers’ pockets remains our focus – not a leap into the unknown with no tangible guarantees.
In the end, for us Liberals, the affirmation of Quebec and the flourishing of our French language and our culture are best served within the Canadian federation. The economic strength of the Quebec nation remains the best guarantee of our nation’s strength.
– Marc Tanguay, Interim Leader of the Quebec Liberal Party