08/03/2012 04:00 EDT | Updated 10/02/2012 05:12 EDT

How has Quebec's economy fared under re-election seeking Jean Charest?

MONTREAL - Understatement is a stranger to Quebec Premier Jean Charest when it comes to talking about his economic performance.

"Excellent," is how he sums it up without hesitation. "We had an outstanding performance by any measure."

He's quick to point out that isn't just his analysis.

"Bernard Landry said that last year," Charest says, invoking the former Parti Quebecois premier. "He said, 'You know, Quebec has probably had one of the best performances in the world."

In fact, he's so confident of his reputation as an economic manager that he has staked his re-election campaign on that as a central issue.

But do the numbers back up his bravado?

The Quebec economic outlook since Charest took office in 2003 holds clear bright spots — significantly lower unemployment, resilience during the recession, and development projects from the subarctic to suburban Montreal.

The cloudy patches overhead, however, include heavy levels of debt and taxes — which remain, in both cases, the highest in the country.

Charest's claims don't rattle his main adversary, current PQ Leader Pauline Marois.

She dismisses his plan to bring the province toward full employment — with a six per cent unemployment rate as Charest's target — by 2017.

"As usual, Mr. Charest promises many things and doesn't always follow through," she said Thursday.

"In 2008, he promised that the Plan Nord would create 20,000 jobs. It's 10,000 jobs at the most.... In 2008, Mr. Charest said many things that never came true — that he would never raise taxes, that there was no deficit problem.... So we'll take Mr. Charest's promises with a little grain of salt."

Charest can point to the fact that unemployment is down to one of its lowest levels in decades.

The unemployment rate is 7.7 per cent today, down from 9.2 per cent in 2003. Compared to the national average, the gap has narrowed significantly: Quebec's rate is just 0.5 per cent higher than the Canadian average today, while it was 1.6 per cent higher in 2003.

Charest is particularly proud of his achievements since 2008, saying Quebec has done better in terms of economic growth than the United States, Ontario, Canada and Europe in the recession.

But Luc Turgeon, a University of Ottawa political economy observer, notes that's not the whole picture.

"Quebec still has a fairly high deficit, a very high debt level," he said in an interview.

"Mr. Charest, despite many of his promises of reforming the state, reforming the economy, hasn't changed that much in that a lot of the areas where Quebec was successful — for example in high-tech — a lot of those changes have been made by the PQ government in the 1990s.

"It's a bit of a mixed success, if you want, for Mr. Charest."

But both Turgeon and Carlos Leitao, chief economist of the Laurentian Bank, point out that circumstances pushed Quebec in a direction that helped it weather the global economic storm.

"Some would argue it's a question of luck," said Leitao.

He said Quebec was already implementing a massive infrastructure refurbishment program in the wake of a devastating overpass collapse in 2006 that killed five people and prompted a public inquiry into the state of the province's bridges and buildings.

"The government was even able to accelerate that (program) a bit so their reaction was faster and more appropriate than, I think, elsewhere in North America."

He acknowledged Quebec has hefty debt but says that's unavoidable given the last few years.

"You can't have a vast program of infrastructure spending and decrease the debt," he said. "You can't do both at the same time."

When he became premier, Charest promised to slim down the state. Under his watch, however, Quebec's gross debt has gone from $133 billion — which was 53.5 per cent of the GDP — in 2003 to $184 billion in 2012. The current amount is 55.5 per cent of GDP.

That's more than a dozen percentage points higher than the next most-indebted province, Ontario, which is grappling with structural challenges to its economy.

However, financial markets don't seem especially fretful. Quebec's credit rating of AA2 with Moody's Investors Service is equal to that of every province east of Manitoba and higher than the Royal Bank's; the Western provinces have better ratings.

The government says it's on track to balance its books by 2013-14 with a tight control on spending in the last two years. It has also introduced service fees, like the university tuition hikes that have caused so much controversy.

The Conference Board of Canada calls the mining industry a persisting bright spot.

With that industry in mind, Charest has presented a legacy project — his Plan Nord — which sets out $80 billion in public and private investments in the North in mining, energy, infrastructure and conservation projects over a quarter-century.

Before 2008, little stood out about Charest's handling of the province's economy that would have distinguished it, Leitao said.

But Leitao said that Quebec stands out more post-2008 by putting in place a credible plan to return to fiscal balance.

He also called Charest's northern development plan a key trigger for economic growth.

He said while politicians are quick to promise to create jobs, that's really the task of the private sector and the government needs to supply a favourable fiscal, regulatory and tax environment.

"They've done what I think is a good job in terms of reducing corporate income taxes and personal income taxes but the overall tax burden for businesses is still a little heavy especially for small enterprises," he said.

The top provincial income-tax rate in the province is 24 per cent for someone earning $80,200, while someone earning a similar amount pays half that — 12 per cent — in neighbouring New Brunswick and 11 per cent in Ontario.

The corporate tax rate is closer to Ontario's and, like other Canadian provinces, is lower than in the United States.

Leitao deemed the government's Generations Fund, which will draw on mineral royalties and increased hydroelectric rates as of 2014, as an "interesting" way to control the debt.

"This fund will grow fairly quickly after 2014-2015 and so that's one way to bring down the net debt and in a rather rapid fashion," he said.

Charest might want to gloat with caution, though.

The National Bank said last month that Quebec's economy has been "treading water with no growth in the first four months of the year. That contrasts with Canada as a whole which saw growth in the first four months running at an annualized pace of 1.2 per cent."

-With files by Peter Rakobowchuk and Jonathan Montpetit