The Globe and Mail - 11.03.2020

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Mississauga, ON, L4V 1W1.

The Quebec government will
boost program spending and
plans to pour billions of dollars
into improving schools, hospitals
and transit lines, according to a
budget unveiled on Tuesday that
was written before the global
economy darkened.
Finance Minister Eric Girard
projects a balanced budget, in-
cluding a $2.7-billion payment in-
to Quebec’s debt repayment
fund, but relies on robust project-
ed economic growth of 2 per cent.
The budget does not address the
recent crash in the stock market,
and barely mentions the CO-
VID-19 outbreak that has sick-
ened and killed thousands, put ci-
ties around the world under quar-
antine, broken supply chains, dis-
rupted industries and wilted
investor confidence.
However, Mr. Girard, consid-
ered a fiscal conservative in the
Coalition Avenir Québecgovern-
ment, said an increase in pro-
gram spending of 5.1 per cent and
long-term infrastructure invest-
ment will stabilize the economy.
“Our timing couldn’t be bet-
ter,” he said. “It may be the virus
will have an impact on the confi-
dence of consumers. When pri-
vate demand weakens, public ad-
ministration has a role to play.”
Mr. Girard strayed from his
budget documents to point out
that economists have recently
downgraded their global eco-
nomic growth projections to 2.
per cent from 3 per cent. Quebec
relies heavily on exports and the
global economy, but “this is man-
ageable,” he said. “Our public fi-
nances are in excellent shape, our
financial framework remains sol-
id.”
Mr. Girard said extra money
would be available if the CO-
VID-19 outbreak affects Quebec
in a major way. He declined to say
if he would allow the budget to go
into deficit.
“What we’ve seen in the past

with health crises is, if it is con-

tained early, we will see a bounce-

back,” Mr. Girard said. “The econ-

omy was doing well in February,

we had record employment.

March was more severe. We will

see what the evolution of the vi-

rus is.”

Among other projections, the

budget document predicted sta-

ble interest rates, oil prices and a

steady Canadian dollar – all of

which were proven wrong just in

the past week. These factors are

not necessarily negative for Que-

bec’s finances, because the prov-

ince is heavily indebted, buys oil

and drives its economy with ex-

ports, which are more competi-

tive with a weakening Canadian

dollar.

Carlos Leitao, the Quebec Lib-

eral finance critic, said the gov-

ernment projections are too opti-

mistic. The plan pushes at least

half of new spending beyond the

current mandate and demon-

strates a lack of urgency, he said.

“The Finance Minister is mini-

mizing the threat of an economic

slowdown,” Mr. Leitao said. “The

signs have been there since the

start of the year, the North Amer-

ican economy was slowing down.

It’s very dangerous.” The growth

projection, he added, “lacks ri-

gour. It’s unrealistic.”

Mr. Leitao has called on the

government to set aside $1-billion

that could be “deployed rapidly”

in an economic shock. “There is

just an enormous amount of un-

certainty right now,” he said.

While the budget plan prom-

ises an additional $5.9-billion in

spending on schools and $3.3-bil-

lion on public transit, those sums

are spread over a 10-year infras-

tructure plan and would not kick

in until 2023. Christian Dubé, the

Quebec Treasury Board Presi-

dent, said the timeline is neces-

sary to allow studies, planning

and competitive bidding process-

es.

The CAQ government has

made a priority of increasing

Quebec’s standard of living to be

competitive with that of Ontario

and to get the province off federal

equalization payments.

Mr. Girard said Quebec’s stan-

dard of living as measured by real

GDP per capita was 13.6 per cent

behind Ontario’s in 2019, an im-

provement of nearly two percent-

age points from the year before.

In 2019, Quebec’s standard of liv-

ing was $47,853 in GDP per resi-

dent compared with $54,360 for

Ontario. Quebec will receive

$13.2-billion in equalization pay-

ments from the federal govern-

ment for this budget year, a $100-

million increase over last year.

The province’s gross debt

stands at $197.6-billion for 2020-

21, a decline of $1.5-billion from

the previous year. The debt as a

percentage of the size of the econ-

omy sat at 43 per cent, an 11.8-per-

centage-point decrease from the

most recent peak in 2014-15.

Environmentalists criticized

Premier François Legault during

his 2018 election campaign and

since because his party lacked a

detailed climate change plan.

Green initiatives unveiled on

Tuesday include $265-million this

budget year in spending on pro-

jects such as the electrification of

public and private transport, in-

cluding incentives to buy electric

cars. The sum is expected to in-

crease to $1.35-billion a year in

2025. Thegovernment has prom-
      ised to hit the greenhouse gas
      emissions reduction target of 37.
      per cent by 2030.
      Nature Quebec, a conservation
      group, condemned the measures
      as demonstrating a “lack of ambi-
      tion in addressing the climate cri-
      sis and nature protection.”
      “This is not a green budget,”
      said Manon Massé of the left-wing
      Québec Solidaire. “This is an ac-
      counting exercise in greenwash-
      ing. The targets are modest, the
      sums are minimal, many of them
      are not new, many reach beyond
      the government’s mandate.”

Quebectoraisespendingoneducation,healthcare

QuebecLiberalfinancecriticCarlosLeitao,seeninQuebecCityonTuesday,saystheCoalitionAvenirQuébec’s

latesteconomicprojectionsaretoooptimistic.JACQUESBOISSINOT/THECANADIANPRESS

FinanceMinister

forecastsbalanced

budget,butfiscalplan

wasdrawnupbefore

marketturmoilover

oilcrash,virusconcerns

LESPERREAUXQUEBECCITY

A continuing RCMP investigation
into the SNC-Lavalin affair ap-
pears to have delayed an inquiry
by Canada’s lobbying watchdog
into whether improper lobbying
took place on behalf of the Que-
bec construction and engineering
giant.
The Globe and Mail has report-
ed that the RCMP are determining
whether there is enough evi-
dence to launch a criminal inves-
tigation into possible obstruction
of justice by senior officials in the
Prime Minister’s Office who
pressed the attorney-general in
2018 to order a deferred prosecu-
tion agreement for SNC-Lavalin
Group Inc. on fraud and bribery
charges.
The examination is in the
hands of the RCMP’s national di-
vision, which is in charge of sensi-
tive cases. The lead investigator,
Sergeant Fred Pincince, has spo-
ken with some players in the mat-
ter in the past couple of months,
according to sources who The
Globe is not identifying so they
could talk about the inquiry.
In an appearance before the
House of Commons ethics com-

mittee on Monday, lobbying com-

missioner Nancy Bélanger was

asked by NDP MP Charlie Angus if

she had made progress on his

2019 request to investigate SNC-

Lavalin and its representatives

under Section 6 of the Code of

Conduct for Lobbyists.

That section says: “A lobbyist

shall not propose or undertake

any action that would place a

public office holder in a real or

apparent conflict of interest.”

Mr. Angus alleges that SNC-La-

valin breached the law through

its repeated lobbying in a bid to

persuade officials in the Prime

Minister’s Office to help the com-

pany avoid criminal prosecution

over its business dealings in Li-

bya.

Last year, independent watch-

dog Democracy Watch asked the

commissioner to investigate

whether Kevin Lynch, a former

clerk of the privy council, violat-

ed the Lobbying Act and the code

of conduct by failing to register as

a lobbyist for SNC-Lavalin. It also

asked that she investigate wheth-

er former SNC-Lavalin chief exec-

utive Neil Bruce violated the code

by not taking effective steps, as

the responsible senior officer for

the company, to ensure Mr.

Lynch’s lobbying was registered.

In a report released in August,

federal Ethics Commissioner Ma-

rio Dion found Prime Minister

Justin Trudeau violated the Con-

flict of Interest Act by improperly

pressing Jody Wilson-Raybould

when she was attorney-general to

instruct the director of the Public

Prosecution Service, Kathleen

Roussel, to grant a deferred pros-

ecution agreement to SNC-Lava-

lin. In December, a division of

SNC-Lavalin pleaded guilty to

fraud and agreed to pay a $280-

million fine.

In a carefully worded response

to Mr. Angus’s question, Ms. Bé-

langer told MPs she could not talk

about SNC-Lavalin’s lobbying and

indicated it was owing to an

RCMP inquiry.

“I cannot confirm anything in

relationship to investigations

that I conduct and it is really be-

cause I need to ensure the integri-

ty of all investigations, including

that of the RCMP,” Ms. Bélanger

said. “I cannot be talking to all the

witnesses at the same time as the

RCMP.”

Ms. Bélanger told MPs that

when she has reasonable grounds

to believe someone she is investi-

gating has committed an offence,

she must stop the case at that

point and refer the matter to a

“peace officer, most often the

RCMP.”

She added: “I don’t complete

those investigations that I send to

the RCMP, I suspend them and

then I wait for them to do some-

thing – whether they send it back

to me or whether they have a

charge.”

Ms. Bélanger’s senior media

adviser said once the RCMP has

dealt with the matter, the com-

missioner can complete the in-

vestigation and report the find-

ings to Parliament.

Mr. Angus said he believes Ms.

Bélanger clearly signalled on

Monday that she’s referred an al-

leged lobbying infraction to the

RCMP.

The RCMP also declined to

comment when asked for details

of its investigations. “Unfortu-

nately, we are not in a position to

confirm anything in that regard

at this time,” the media relations

unit at the RCMP’s National Divi-

sion said in a statement.

Mr. Trudeau’s communica-

tions director, Cameron Ahmad,

said he had no knowledge of

whether the RCMP has spoken to

members of thegovernment who

were involved in the SNC-Lavalin

affair.

University of Ottawa law pro-

fessor Jennifer Quaid said she

can’t comment on what the

RCMP might be doing, but said:

“She’s being extremely careful

about what she says, and yet at

the same time is trying to say as

much as she can say.”

Prof. Quaid said it’s clear from

Ms. Bélanger’s testimony that the

only opportunities the watchdog

has to report on any investigation

is when it is concluded or has re-

sulted in some outcome.

“She obviously would have

liked to say, ‘Look, the RCMP still

have it .... And I haven’t heard

from them and I’d like to tell you

more and I’d like to tell you who it

involves, and I’d like to tell you

what charges, but I can’t,’ ” she

said.

A SNC-Lavalin spokesman said

the company is very transparent

about representations togovern-

ment.

“We have always stated that

ourlobbying activities are a mat-

ter of public record,” Nicolas Ryan

said.

A 2019 report on the firm’s

website regarding its lobbying

and political activities says SNC-

Lavalin engages with public offi-

cials “in a proactive, honest, re-

sponsible, sustainable, transpar-

ent and accountable manner.”

Lobbyingwatchdog’sSNCprobecouldbedelayedbyRCMPinvestigation

ROBERTFIFE
STEVENCHASEOTTAWA

NewBrunswick’sgoverning

ProgressiveConservativestabled

a$10.2-billionbudgetTuesday

thatcouldprovetobetheir

undoing,giventheirtenuous

minorityinthelegislature.

FinanceMinisterErnieSteeves

presentedthesurplusbudgetas

theOppositionLiberalsprom-

isedtovoteagainstit.

Amongthebudget’shigh-

lights,healthspendingwill

increasetoarecord$2.9-billion,

whichincludesnewmoneyfor

hiringnursepractitioners.

Mr.Steevessaid$1.5-million

willbeaddedtotheprovince’s

vaccinationprogram,whichwill

allowallNewBrunswickersto

haveaccesstofreeflushots.

Gastaxesaresettodecrease

by4.63centsalitre,effective

April1,aspartoftheNew

Brunswickcarbonplan.Theplan

iscontingentonlegislation

passinginthelegislatureprior

toApril1.

Socialassistancerateswill

increaseforthefirsttimesince

2014.Therateforasingleadult

willincreaseto$564amonth

from$537.Aswell,theratewill

beindexedtotheConsumer

PriceIndex.

Taxesoncommercialand

residentialrentalpropertieswill

bereduced,butnotuntilthe

2021taxyear.

THECANADIANPRESS

NEWBRUNSWICK’SPCGOVERNMENTTABLES$10.2-BILLIONBUDGET