Partial containment this fall of several regions is expected to translate into hundreds of millions of dollars less in the Quebec government coffers, according to an analysis by the Institut du Quebec (IDQ). However, the chasm should be shallower than in the spring.
Over the past few weeks, the IDQ has assessed the impacts on state revenue from eight different containment scenarios based on the results and duration of the 1re Quebec break.
For the second wave of the pandemic, despite still several uncertainties, the shortfall for Quebec in taxes, among other things, due to the reduction in non-essential people’s expenses, should oscillate “between $ 660 million and $ 2.1 billion $ ”, figures the Institute.
This analysis does not take into account the revenues of crown corporations as well as the “explosion” of spending in certain sectors, such as health and education, to meet safety requirements.
Reserve of $ 4 billion
In June, Quebec announced it was forecasting a record deficit of $ 14.9 billion for the current year. To face the pandemic, the government then claimed to have set aside a reserve of $ 4 billion.
An “amount sufficient to compensate for the losses in taxes”, judges the IDQ, adding however that “this reserve will not necessarily be sufficient to cover the expenses related to the recovery” of the economy, because “several sectors will be totally to rebuild […] “.
According to the IDQ, the more targeted measures in the red zones this fall allowed several industries to continue operating, which limited the impacts on the economy. Some sectors still suffer “strongly” from these restrictions, such as restaurants, tourism, accommodation, arts and culture.
“We do not know the amounts, but the government will certainly have to put out the money to support these industries. This is where we don’t know if the $ 4 billion will be enough, ”says Mia Homsy, CEO of IDQ.
In addition, Ottawa’s financial aid for businesses and individuals has also helped limit the impacts of partial containment, says the IDQ, which believes the economy will recover in 2021.