The Minister of Finance Comments on the Intergovernmental Meetings of
December 19 and 20 in Alberta

QUÉBEC, Dec. 17, 2010 /CNW Telbec/ - A few days from the meeting of the Provincial-Territorial Council of Ministers of Securities Regulation in Calgary on December 19, and the federal-provincial-territorial meeting of Finance Ministers in Kananaskis, December 20, the Minister of Finance, Minister of Revenue and Minister responsible for the Montréal region, Raymond Bachand, commented on the main issues on the agenda.

He first noted that the Minister of Employment and Social Solidarity and Minister responsible for the Régie des rentes du Québec, Julie Boulet, will also take part in the discussion on pension plans at the Kananaskis meeting.

MEETING IN CALGARY ON SECURITIES

At the meeting of the Provincial-Territorial Council of Ministers of Securities Regulation, the ministers will discuss, among other things, the importance of continuing the work initiated in the wake of the international reforms affecting the financial sector. Despite the debate instigated by the federal government, which is seeking to replace the provinces in regard to securities regulation, the provinces intend to fully carry out their responsibilities in this field.

MEETING OF FINANCE MINISTERS IN KANANASKIS

Economic and budgetary situation
In Kananaskis, Finance Ministers will begin their meeting with a discussion with the Governor of the Bank of Canada, Mark Carney, on the Canadian and international economic outlook.

Mr. Bachand pointed out that Québec emerged from the recession in better shape than expected, with an economic contraction of only 0.3% in 2009. "However, it is important to remain cautious in view of the uncertainty regarding the situation in the United States and Europe in particular," the Minister said.

"It is also important to remind that the action plan the Québec government implemented to support the economy has produced results, limiting job losses and accelerating recovery. From the July 2009 low to now, 112 000 jobs have been created in Québec. That represents 160% of the jobs lost during the recession," Mr. Bachand pointed out.

On budgetary matters, the Québec economy's good performance has led to improved results for 2009-2010. The year ended with a deficit of $3.2 billion, which was $1.1 billion (25%) less than forecast. "We are staying the course on returning to balanced budgets by 2013-2014, within three years," the minister insisted, reiterating the strong commitment of his government on this matter.

Improving the retirement income system
In Kananaskis, Finance Ministers will also continue working on retirement income, a matter raised during their meeting last June in Prince Edward Island.

Concerning retirement income, the Minister, Ms. Julie Boulet, insisted on the fact that "Québec's primary preoccupation is to secure the long-term financial stability of the Québec Pension Plan and, by the same token, maintain inter-generational equity." To that end, she reminded that the public consultation in 2009 provided an opportunity to study possible solutions that, in a context of an aging of the population, will help rebalance the funding of the plan and encourage experienced workers to continue working.

Minister Boulet underscored that while, on the whole, the retirement income system is working well, some low and middle-income households are not saving enough for retirement, in particular workers who do not have a pension plan with their employer. These workers risk seeing their standard of living decline in retirement.

Québec considers that developing a harmonized regulatory framework among the provinces to foster the establishment, by the private sector, of large-scale multi-employer plans in Canada would be a worthwhile way to increase savings for retirement, in particular for self-employed workers and workers in SMEs. According to Mr. Bachand, "the federal government must undertake to amend its tax legislation and regulations to enable the development of large-scale pension plans that feature low costs for participants. That would give a clear signal on the willingness to quickly improve Canada's retirement income system."

Regarding the enhancement of the Canada Pension Plan and the Québec Pension Plan, more work needs to be done to assess the option that best addresses the savings issue, while minimizing the impact of higher contributions on the economy.

"The proposed changes to the retirement income system must take into account the impact they may have on businesses and households, at a time when the global economic recovery remains hesitant. In addition, these changes must not encourage experienced workers to leave the labour market prematurely," Minister Bachand noted.

2014 renewal of federal transfers
Lastly, the Kananaskis meeting will provide an opportunity to review the work done so far by committees of finance department officials for the 2014 renewal of the main federal transfers, affecting in particular health, post-secondary education, infrastructure and equalization.

"For Québec, it is important that the 2014 renewal of federal transfers be based on facts and that it allow the implementation of federal transfers that attain their objectives adequately, in a spirit of fairness for all partners of the federation," the Minister of Finance indicated.

"It is also important to be aware of how little time remains to carry out the work and have the discussions that are needed between the federal government and the provinces. To have minimum advance notice of the changes that are likely to affect their financial framework as of 2014, the provinces want the broad outlines of the renewal to be announced in the 2013 federal budget. Accordingly, the major decisions need to be made by the fall of 2012, i.e. within the next two years," Mr. Bachand concluded.

For further information:

Sources :

Catherine Poulin Communications Director Office of the Minister of Finance, Minister of Revenue and Minister responsible for the Montréal region    418 643-5270 514 873-5363

Nicolas Murgia Press Relations Officer Office of the Minister of Employment and Social Solidarity and Minister responsible for the Mauricie region 418 643-4810