Quebec will pay $9.5 billion in debt interest this year, equivalent to all the income tax paid by 1.5 million Quebecers, says think tank MEI.
In other words, almost 85 percent of all the people in Montreal will pay all their income tax to just cover the debt interest.
“The government is no longer paying one or two per cent interest on new debt, and it shows in the budget,” Renaud Brossard, senior director of communications at the MEI, said in a release March 21. With increasing interest rates, Finance Minister Eric Girard should have focused on returning to a balanced budget, MEI said.
But the Quebec government is projecting a shortfall of $4 billion for 2023–2024. It does not expect to balance its budget until 2027.
Quebecers pay more per person than most Canadians on debt interest, at $2,110 on federal and provincial debt combined, according to the Fraser Institute. The only province that pays more per person is Newfoundland and Labrador, at $2,727.
Ontario’s debt interest payment per person is about $1,800. For the provincial debt interest alone, Ontario is poised to spend $14.5 billion this year, according to the province’s economic outlook report.
Overall, the provinces and federal government are expected to spend $68.6 billion on interest payments, the Fraser Institute said in its assessment of debt interest for 2023. To put that in perspective, it’s more than the federal government will spend on child care benefits and employment insurance benefits for the year combined.
Quebec’s Minister Girard announced March 21 that the province’s budget includes a 1 percent income tax cut to each of the two lowest tax brackets. Yet, MEI says, “Quebec remains, this year again, the place with the highest tax pressure in North America.” Income tax for those two brackets will now sit at 14 percent and 19 percent.
