CAQ, Liberals compete to offer tax cuts on Day 2 of Quebec election campaign

·3 min read

QUEBEC — The two top parties running for office in Quebec's election campaign held competing news conferences in the provincial capital on Monday to promise income tax cuts if they are elected on Oct. 3.

Coalition Avenir Québec Leader François Legault said if he's elected premier again, his government would reduce by one per cent the first two income tax brackets, starting 2023. He also promised to cut income taxes by a total of 2.5 per cent over the next 10 years.

"Quebec, we know, has taxation levels that are very high," Legault said, adding that Monday's announcement was the first of four promises related to helping voters deal with the rising cost of living.

The tax cuts, he added, are "going to help Quebecers have more money in their wallets to face inflation."

Quebecers making $80,000 a year would save $630 in taxes per year, he said, adding that he would pay for the cuts by reducing the amount of payments the government must make every year into a fund — called the Generations Fund — dedicated to reducing the province's debt.

“We will use 39 per cent of the payments to the Generations Fund," Legault said. "There may be political parties that will use 100 per cent of the payments; we think it's irresponsible to do that," Legault said.

Meanwhile, the Liberals, who had promised before the start of the election campaign to reduce by 1.5 per cent the first two income tax brackets, announced on Monday more measures to fight inflation.

The party is proposing to freeze Hydro-Québec rates and abolish the Quebec sales tax on the first $4,000 of a client's electricity bill. The Liberals are also promising to abolish the Quebec sales tax on basic necessities and increase a tax credit for the most disadvantaged.

Liberal Leader Dominique Anglade estimated that the total savings would amount to $5,000 per family of four if her party wins the election. But she said that $5,000 in savings is also tied to measures that haven't been announced yet.

One political scientist says the tax-cut promises are being driven by inflation and cost-of-living concerns, but also by a financial situation in the province that is better than expected. There is also an element of competition involving parties on the right side of the political spectrum, Daniel Béland, director of the McGill Institute for the Study of Canada, said Monday.

The Conservative Party of Quebec, he added, has promised even deeper tax cuts than what was proposed by the two leading parties on Monday. The Quebec Tories, Béland added, are fighting with the CAQ for seats in the Quebec City area.

"It's normally popular when you talk about tax cuts, but of course people don't always think about the trade-off," Béland said.

Legault's party has said it wants to reduce the high tax burden that Quebecers face. The CAQ says Quebecers pay, on average, four to five per cent more tax than other Canadians.

Béland said with higher taxes, the province has been effective in fighting poverty and in instituting progressive family policies and affordable child care — waiting lists aside.

Quebecers, however, are clearly dissatisfied with the management of their health-care and long-term care systems, according to polls.

As well, the provinces, including Quebec, are asking for increased health-care spending from the federal government while looking to cut taxes, which is an odd position to take, Béland noted.

"Yes, parties are saying they will act to fix these problems, but people will have to understand that tax cuts might mean less money for other things like health care, long-term care, so forth," Béland said.

This report by The Canadian Press was first published Aug. 29, 2022.

Sidhartha Banerjee, The Canadian Press