According to Eric Girard | The referendum perspective will cost at least 100 million over five years
(Quebec) The threat of a referendum on Quebec sovereignty is already having an impact on public finances, says the Minister of Finance. Borrowing costs are rising by at least $20 million a year due to political uncertainty.
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“I confirm to you that there is a minimum of a bonus of 5 basis points currently linked to the prospect of a referendum in a first mandate,” said Eric Girard in a press scrum Wednesday at the National Assembly.
“If our average cost was 4%, it is more like 4.05. Since we borrow 40 billion per year, that’s 20 million per year; after 5 years, 100 million,” he added. He arrived at this result by studying the differences in borrowing costs between Quebec, Ontario and British Columbia. “It’s very popular,” he explained.
Former conservative federal candidate and CAQ Minister of Finance since 2018, Mr. Girard makes no secret of having voted “no” in the last referendum.
“If they need me [le camp du non] to explain the impacts, it must be clear that sovereignty is a legitimate political project, but economically it would be extremely difficult during the transition period,” said Mr. Girard.
Equalization
“The federal government spends on average more than 20 billion than what it collects in Quebec, including the transfer of 12 billion in equalization on average,” argued the minister. “It would be difficult economically, it would be very difficult in terms of public finances. Quebecers understand that and that’s why the majority is against it.”
Even if the Parti Québécois has not yet taken power, it is “ahead in the polls” and “advocates the sovereignty of Quebec,” argued Mr. Girard. This simple fact “creates uncertainty.” “The uncertainties are accumulating: prices, difficulty linked to the rise in the cost of living, companies which invest less,” he said.
“Currently yes, it costs more to borrow because of the prospect of a referendum in a first mandate,” said the minister.
