Key rate increase: not a question of improving checks by $400 and $600

Checks promised to help Quebeckers hit by inflation will be delivered before Christmas, the Legault government promises. However, increases to $400 and $600 are out of the question, despite another increase in the Bank of Canada’s key rate.

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The central bank raised its key rate by 50 percentage points on Wednesday morning, which will lead to further increases in mortgages and lines of credit. Ottawa hopes to curb soaring prices by forcing households and businesses to cut spending.

At a press conference Wednesday, Premier François Legault confirmed that Quebec will send a $600 check by Christmas to every citizen whose income does not exceed $50,000 and $400 to those who earn less than $100,000 a year.

But Quebec rejects the idea of ​​more aid. “The actions we’ve promised are reasonable,” said Finance Minister Eric Girard, who said Quebec still has a one-in-two chance of going into recession.

The aid will be confirmed in an economic update in early December.

Unlike last time, these will be checks, not tax breaks. In other words, the amount is not reduced if the taxpayer owes an amount to Revenu Québec.

At the same time, the CAQ government will also increase support for seniors earning less than $25,000 a year from $411 to $2,000. These, Mr. Legault points out, generally cannot replace the deficit by seeking more income.

Quebec also intends to introduce its bill to limit government rate increases, including Hydro-Quebec’s rates, to 3%.

The prime minister wants it to be adopted before the end of the year. “Cooperation with the opposition will be important there,” stressed François Legault.

However, by convening the Diet until November 29, the Prime Minister opted for a short session of the Parliament before the holiday break.

François Legault says he needs time to fine-tune the details of the measure. “Compromises have to be made,” he says.

“As we can see, the economic situation is also deteriorating, of course. This means that economic growth in Quebec and then worldwide is lower than predicted in the pre-election report. So there will be a loss of income. So we have to ask ourselves: what are the implications for the decisions we want to make? We have to act responsibly,” says François Legault.

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