Tax cuts, health spending in Quebec pre-election budget

Liberal Premier Jean Charest is offering Quebecers modest income tax cuts to the tune of $250 million, and a total of $1.3 billion in extra health-care spending in his government's pre-election budget, tabled on Tuesday.

The $250-million in tax cuts will take effect on Jan. 1, 2008, said Quebec Finance Minister Michel Audet, who presented his government's "rigorous" and "responsible" budget, which was revealed a day before the expected election call.

Thehealth spendingincrease, which will bring total spending to$23.6 billion, will go in part to hire new doctors and tackle surgery waiting lists.

The Liberal budget also earmarks $7.9 billion for roads and bridges, with financial incentives for drivers who buy certain hybrid vehicles. Quebec will reward the purchase of eligible hybrid cars with a $2,000 provincial sales tax refund.

Audet's budget also includes special measures for the province's biggest cities, Montreal and Quebec City, which he referred to as "economic engines" for Quebec.

The Liberal government budget invests $900 million over five years in the greater Montreal region, which Audet said "plays a crucial role in Quebec's development." The province will also refund gas taxes paid by the Montreal Transit Corporation, and will assume $11 million of the city's public transit deficit.

The province will invest $300 million in Quebec City, and an additional $15 million to refurbish the Jean-Lesage airport.

Quebec will also inject $300 million into rural regions where local economies have suffered a spate of job cuts and plant closures.

Other budget highlights:

• $567 million investment in education.
• $10 million in day-care tax credits that will extend to all families regardless of their income, such as self-employed parents or farmers' spouses.
• $36.5 million to clean up the Saint-Charles River outside Quebec City.
• Elimination of capital investment tax for manufacturing businesses.
• $10 million for Quebec's film industry.
• $110 million for Quebec City's 400th anniversary celebrations.

The 2007 budget is balanced, with a total of $60.8 billion in spending.

Quebec's debt will hit $122 billion in fiscal 2007-2008 and the province is warning of a shortfall of almost $1 billion for next year's budget.

Opposition parties not impressed

Both of Quebec's opposition parties tore apart the Liberal government's budget, accusing Charest of building his financial blueprint on a foundation of broken promises.

Parti Qubcois finance critic Francois Legault said given the Liberals failed to deliver on earlier budget promises such as tax cuts and health spending, this new list of investments rings hollow.

"I think that the people of Quebec will not buy this budget," he said Tuesday.

ADQ leader Mario Dumont is skeptical rural areas will ever see the money they need to diversity their economies.

"The regions of Quebec know that type of announcement for the year of the election, and then they're forgotten for the years after," he said.