DURING THE QUEBEC ELECTION LAST autumn, Pauline Marois’ Parti Québécois promised to make a slew of changes. These included eliminating the $200 per person health tax, stepping up enforcement of Quebec’s charter of the French language, and creating a new Banque de développement économique du Québec, with the goal of bringing together existing business financing and new venture capital.

But Marois, elected with a minority, has faced a storm of oppostition. As a result, she has scaled back her ambitions – beginning with the health tax, which was reduced instead of eliminated. And Bill 14, which would extend “francisation” language rules to businesses with as few as 26 employees, has run into opposition from the Quebec Liberals and the Coalition Avenir Québec. Those two parties, which together can outvote the PQ, have also scuttled the Banque de développement économique du Québec, judging it too complex.

The two Opposition parties are politically to the right of the PQ. Their attacks have focused on the economic performance of the new government, charging that investment is down and the language bill has sapped business confidence. The Marois government is accused daily of mismanaging the economy and driving away investment.

The Opposition has also taken aim at the PQ’s new mining royalties, now Canada’s highest. Still, the new royalties, at about 22%, are lower than the 30% levy the PQ promised in its election campaign.

Perhaps even more challenging for the PQ’s goals, Quebec adopted a balanced-budget law in the late 1990s. It requires the Marois government to balance the province’s finances in the current fiscal year.

That has meant much nickel-and-diming in the hunt for savings. Sectors that depend on public dollars – from universities to the health network and social assistance to daycare – have been asked to make cuts.

The province is also trying to boost revenue. Quebec is authorizing the sale of alcohol in the gambling areas of Loto-Québec casinos, a measure anti-gambling groups see as encouraging problem gamblers.

But the tighter fiscal measures appear to be paying off.

Major rating agencies, such as Standard & Poor’s Financial Services LLC, have maintained their ratings on Quebec bonds. While the rating agencies have noted that Marois leads a government intent on making Quebec an independent country, they also point out that little is about to happen on that front soon, given the PQ’s minority status. And, in general, the agencies appear to be impressed by the determination of the PQ to balance Quebec’s budget.

One discordant voice has been that of a former PQ premier and the party’s first finance minister, Jacques Parizeau, who says Quebec will actually have a $1-billion surplus in the current year.

But Nicolas Marceau, the current PQ finance minister, is sticking to his guns, saying that he plans to use the $1 billion to pay down Quebec’s $246-billion debt, now about 54% of GDP. It appears that the Marois government is keeping a sharp eye on the bottom line, perhaps hoping that fiscal health will be the best strategy for advancing its nationalist aims.

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