Quebec budget hikes fees, sales and fuel tax

Quebecers are being forced tobear an even bigger tax burden, with a slew of new fee hikes, includingfor health-care services,as the Liberal government wrestles with a looming $4.5-billion deficit.

Tuition and service-fee hikes,gas and sales tax increases, andhealth-carefees are part of the government's desperate push to get its spending under control, and get its books out of the red.

Finance Minister Raymond Bachand tabled his 2010-11 budget in the Quebec legislature on Tuesday afternoon, announcing the government will boost the provincial sales tax by another percentage point to 9.5 per cent as of Jan. 1, 2012; will increase fuel taxes by one cent a litre in each of the next four years; and will introduce an annual health fee that will rise to $200 by 2012.

'The books must ... be balanced as rapidly as possible.' Quebec Finance Minister Raymond Bachand

Opposition Parti Qubcoisdescribed the budget as "shocking" and "unacceptable" foraskingtaxpayers to help cover government debt.

But Bachand said Quebec has no choice in the matter. "The books must be balanced as rapidly as possible," because Quebec's aging population means fewer people will be working as time goes by, he said.

Quebec'ssales tax is already slated to rise to 8.5 per cent from 7.5 per cent in January 2011, which means Quebecers will then be paying more tax than almost any other Canadians on hundreds of everyday products.

The budget includes plans to increase post-secondary tuition fees in two years. Once Quebec balances its budget, the government will consider raising hydroelectricity rates, Bachand said.

All additional revenue will help Quebec balance its budget by 2013-14, he said.

"We ran deficits out of necessity.We're going to eliminate them out of duty," Bachand toldelected members of the national assembly.

"All Quebecers must pull their weight in this approach aimed at ensuring we maintain control over our choices,"thefinance minister said.

Oppositionscoffs at 'Charest tax'

Opposition parties accused the rulingLiberals of picking Quebecers' pockets clean to make up for the government's financial mismanagement.

PQ Leader Pauline Marois called the new health-care levy the "Charest tax" and accused the premier of breaking his 2008 election promise to not raise taxes and fees.

Action Dmocratique du Qubec Leader Grard Deltell called the fee hikes outrageous.

Once all the new measures come into force, Quebecers will be paying $10 billion more in additional taxes and other charges without any improvement to public services, Deltell said.

The budget also includes measures to freeze the salaries of the premier, cabinet ministers and members of the legislature over the next two years.

Salaries are also frozen for public sector workers, many of whom will see their contracts expire on Wednesday.

Service fee and tax highlights:

• $0.01/litre fuel tax increase every year, for the next four years, starting April 1.
• Annual $25 health-care fee with yearly increases, to $200 by 2012, with a possible health deductible in the future.
• Tuition fee increase in 2012.
• Provincial sales tax increase to 9.5 per cent in 2012.

The budget also allows Quebec City and Montreal to levy an additional $0.015/litre fuel tax to generate funds for public transit andinfrastructure.

Quebec is the mostheavily indebted province in Canada, owing the equivalent of 53 per cent of its GDP.