Quebec launches stimulus plan as election talk heats up

Mon Oct 7, 2013 4:26pm EDT
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By Louise Egan

OTTAWA (Reuters) - The government of Quebec announced a C$2 billion ($1.94 billion) stimulus package on Monday aimed at creating jobs and jump-starting the French-speaking province's sagging economy, which has underperformed the broader Canadian economy this year.

Premier Pauline Marois announced the spending package, which includes tax breaks and power subsidies for companies that invest, amid speculation her separatist government might force a snap election later this year in hopes of turning her minority government into a majority.

But she denied any electoral ambitions and cited growth downgrades by other major economies and the situation in the United States, where a political deadlock has partially shut the U.S. government and raised fears of an eventual debt default, as a reminder of how "precarious" the external environment is.

"Our action has become more pressing because of the world economic context," Marois said in a speech unveiling the spending package. "The recovery has been slow to be felt everywhere in the world."

"These are not policies that were written on the back of a napkin in the expectation that there would be an election tomorrow morning. Far from it," she added.

Quebec's economy contracted in recent months and job creation has also disappointed, with the provincial unemployment rate at 7.9 percent compared with the national average of 7.1 percent.

The government plans to eliminate its budget deficit in the 2013-14 fiscal year.

Marois promised four short-term measures aimed at creating 43,000 new jobs by 2017 and triggering public and private investments of C$13 billion over 10 years.   Continued...

Quebec Minister of Finance and Economy Nicolas Marceau waits for Premier Pauline Marois to arrive and release their new economic policy in Montreal October 7, 2013. REUTERS/Christinne Muschi