A new Quebec study says health-care reforms are inevitable

MONTREAL – Quebec will be able to keep most of its current social system intact as long as it reforms its health-care network and achieves a balanced budget as quickly as possible, says a study released Monday.

It was conducted for the Institut du Quebec and was headed by former provincial finance minister Raymond Bachand.

The study predicts Quebec’s structural deficit could find itself at an insupportable level by 2035 because of an aging population.

Bachand said that’s why it’s important to put the brakes on the increase in health expenses in Quebec, which the Conference Board of Canada estimates have climbed by an average of 5.2 per cent a year over the past 10 years.

“At 4.2 per cent (growth) it works,” he said in an interview. “If we continue to do things the way they were done 20 years ago…we will find ourselves with a major problem that will devastate other programs offered in Quebec.”

Bachand warned that if the status quo on health-care spending is maintained, Quebec could be headed for an annual deficit of $30 billion by 2035.

The study also stressed that the average annual economic growth over the next 20 years should fluctuate around 1.6 per cent, compared with about 2.1 per cent during the last 20 years.

Bachand said every one-tenth of a percentage point in terms of growth would be crucial for the government because it would have an impact on economic leeway.

“If growth were at 1.8 per cent, that would offer more possibilities,” he said. “That would free up $2 billion more per year in 2035, but as of 2020 some money would be available.”

The Institut du Quebec is a newly formed partnership between the Conference Board of Canada and the Hautes etudes commerciales business school.

The release of the study coincided with Quebec Finance Minister Carlos Leitao’s office announcing he will present his first provincial budget on June 4.

The Liberals are aiming to meet the previous Parti Quebecois government’s objective of a $1.75-billion deficit in 2014-15 and a balanced budget the following year.

Leitao says his transitional budget will serve to redress public finances while reviving the economy.

Premier Philippe Couillard has warned since taking power that the time has come for hard economic decisions.