Quebec Unveils $11 Billion Deficit Budget, Plans for Economic Recovery

Quebec Finance Minister Eric Girard recently unveiled a challenging budget for the next fiscal year, projecting a significant $11 billion deficit. This deficit for 2024-25 surpasses initial forecasts by more than three times, with $4 billion attributed to structural issues and the remaining amount linked to new expenditures and debt management. The surge in spending can be traced back to certain pandemic-related expenses that have transitioned from temporary to permanent, the implementation of new collective agreements within the public sector, and the challenging economic landscape at present. In a bid to regain financial stability, the government aims to achieve a balanced budget by 2029-30, a two-year extension from the previously established target. Health and social services spending is anticipated to rise by 4.2%, reaching a total of $61.9 billion for the upcoming fiscal year. Education spending will also experience a notable 9.3% increase, amounting to $22.4 billion. The province is expected to incur $9.7 billion in interest payments on its existing debt in the next fiscal period. To address the deficit and pave the way for a balanced budget, a "comprehensive review" of spending initiatives will be set in motion, focusing on efficiencies and potential savings. Proposals to augment revenue generation include requests for Crown corporations to contribute an extra $1 billion in net revenue over a span of five years and plans to streamline business-related tax credits. Quebec is actively pursuing federal transfers to offset various expenses, encompassing services for asylum seekers and healthcare costs. The government anticipates economic growth of 0.6% in 2024 and 1.6% in 2025. Additional funding has been earmarked for healthcare, with a particular focus on enhancing access to care through digital transformation and bolstering hospital resources. Moreover, cigarette taxes are set to escalate to dissuade smoking while bolstering revenue streams. Further investment in the Higher Education Ministry is geared towards elevating graduation rates and fostering greater accessibility to post-secondary institutions. Notably, Quebec has committed to abolishing retirement pension reductions for seniors with disabilities by January 2025. With Quebec's current debt surpassing $200 billion, deficit spending will contribute further to this figure. In the wake of the budget announcement, all opposition parties have expressed support for the elimination of the retirement pension reduction penalty, set to take effect next year.