Quebec business relieved by Liberal majority win
Dorval: Couillard now needs to tackle public spending and economic growth.
MONTREAL — Members of Quebec’s business community breathed a collective sigh of relief Monday, hopeful that a majority Liberal government will herald an era of stability marked by new investments, jobs and real estate activity in the province.
“I think the business community will be pleased,” said Yves-Thomas Dorval, president of the Quebec Employers Council.
“There was a question mark in the air and now a majority government will certainly provide a better, stable and foreseeable environment.”
Just 18 months after going down to defeat in 2012, Philippe Couillard’s Liberals scored a resounding win April 7, prompting Pauline Marois to quit as Parti Quebecois leader after she lost both her government and her seat in the legislature.
With nearly 99% of polls reporting, the Liberals were elected or leading in 70 seats, compared with 30 for the PQ and 22 for the third-place Coalition for Quebec’s Future. The Liberals claimed 41.4% of the vote to the PQ’s 25.4%.
Dorval called the results a vindication for the Liberals and the Coalition, both of which opted to make the economy central planks of their election platforms.
Polls heading into the vote suggested jobs, the economy and health care were dominant issues for voters. Sovereignty, language and the controversial values charter – all central PQ campaign themes – were well down the list.
Armed with a strong majority, Couillard now needs to tackle public spending and economic growth, Dorval said in a interview.
“This is clearly a tough job,” he said. “The next government will have to be courageous and to take tough decisions in order to cut spending, because we are facing a huge debt and we are facing also increasing demand in public infrastructure.”
Dorval urged the Liberals not to dismiss good features of the PQ and Coalition platforms and not to address the financial shortfalls by raising taxes.
The biggest challenges facing the new government will be to eliminate the $2.5-billion budget deficit and the province’s mounting debt, which is projected to reach $198.4 billion – 54.3% of the province’s GDP – by 2018-19.
The Liberals have pledged to create 250,000 jobs during the next five years, while cutting $1.3 billion in spending. Half of any eventual surplus will be directed to income tax cuts and half to paying down Quebec’s long-term debt.
The Liberals have also promised to relaunch the Plan Nord by stimulating investment in mining, energy and forestry.
Libby Broady, a Montreal area real-estate broker, said she’s hopeful the election of a Liberal majority will convince buyers who put their purchases on hold to take the plunge and buy houses.
“We were very active prior to the election announcement and everything went on hold and I’m hoping now it’s going to become very active again,” Broady said from Beaconsfield.
Former Liberal minister Benoit Pelletier said political stability will allow Couillard’s government to tackle the key economic issues and also encourage investors to have faith in the province.
“One of the messages that I expect Philippe Couillard to send during the next days and next weeks will be that Quebec is again open for business,” said Pelletier, a professor at the University of Ottawa.
Concordia University finance professor Lorne Switzer said the Liberal win might even provide a small boost to both the loonie and Canadian stock prices, although some observers said the prospect of a Liberal victory may already be priced in.
The spread on Quebec bonds has narrowed and Quebec stocks are no longer trading at such a discount, said Norman Levine of Toronto investment management firm Portfolio Management Corp.
“For the markets, it’s going to be a non-event in the short-term,” Levine said.
For the Quebec economy, however, the Liberal win is good news, he added.
“The Parti Quebecois government, they did a really good job of messing up the economy in a pretty short period of time and it cost the economy both jobs and potential jobs,” he said.
“Nothing is going to change overnight, but it’s relief. Had it gone the other way in surprise, it would have been very bad for Quebec-based stocks and probably the Canadian dollar as well.”
© 2014 The Canadian Press