“Economists are not big fans of temporary measures,” Eric Girard says in response to Ottawa removing GST for some items during the holidays.
QUEBEC — The Quebec government has no plans to follow Ottawa’s example and lower the provincial sales tax — unless the federal government compensates it for the lost revenue, Finance Minister Eric Girard said Friday.
The update revealed Quebec’s financial posture has deteriorated by $1 billion since March, with Quebec obliged to dip into its reserves to avoid having its record $11-billion deficit balloon further.
“It feels improvised,” Girard said in the interview. “I will let them explain their measure. When the fiscal data is produced, we will analyze it and make our decisions.”
Asked whether he thinks the plan is a good idea, Girard said: “I’m an economist. Economists are not big fans of temporary measures.”
Ottawa says removing GST from these goods for a two-month period will save $100 for a family that spends $2,000 on those goods during that time. For those in provinces with HST, a family spending $2,000 would save $260.
Thursday’s announcement also included a rebate for Canadians who worked in 2023 and made less than $150,000, totalling $250 per person.
To make this happen, the Trudeau government has to adopt legislation. On Thursday, the federal NDP announced it supports the measures and will back the bill.
The GST is calculated at a rate of five per cent on the selling price and the Quebec sales tax (PST) is calculated at a rate of 9.75 per cent on the selling price excluding the GST.
But Girard was cautious when asked whether he would follow Ottawa and lower the PST. Such a move would cost the treasury millions at a time when Quebec is scraping around for new sources of income.
He said Quebec will do a “serious analysis” of Ottawa’s measures and he plans to discuss it with his federal finance counterpart, Chrystia Freeland.
“We will take our decisions calmly,” he said. “I learned of this yesterday.”
Asked if would consider following Ottawa’s lead and drop the Quebec sales tax on the same items, Girard said: “If they want to compensate us (for the lost revenues), that would facilitate things.”
If they refuse to compensate Quebec, host Patrick Lagacé asked? “It’s no,” Girard responded.