Quebec Finance Minister unveils a budget with a focus on critical sectors and fiscal stability
Quebec Finance Minister Eric Girard has presented the 2024-25 budget, revealing a $11bn deficit, including key spending increases in health and education, and plans for economic growth and debt management.
The budget includes a $1.5bn contingency reserve and allocates $2.2bn to a fund aimed at reducing the province's debt. Projected revenues are set at $150.3bn, marking a 2.4 percent increase, while expenditures are expected to reach $157.6bn, up by 4.4 percent.
The province forecasts a modest real GDP growth of 0.6 percent in 2024, with an improvement to 1.6 percent in 2025, and commits to balancing the budget by no later than the 2029-30 fiscal year, though details on achieving this target are postponed to next year's budget.
Health care and education are at the forefront of Quebec's budget priorities, with health care spending set to increase by 4.2 percent to $61.9bn and education by 9.3 percent to $22.4bn. To secure $2.9bn in savings over the next five years, the budget proposes a series of measures.
These include the abolition or reform of certain business tax credits, mandating provincially owned companies to reduce their expenses, and the enhancement of programs aimed at improving tax collection and combating economic crime.
The budget also announces the phasing out of rebates for electric and hybrid vehicle purchases, starting next year, with a complete end to the rebates by January 2027.
Additionally, it imposes a tax increase on tobacco products by two dollars per carton of 200 cigarettes, effective immediately, with another increase scheduled for January 6, 2025.
Federal transfers are expected to decrease by 6 percent to $29.4bn, largely due to the previous fiscal year's one-time health transfer and changes to the federal equalization formula.
Quebec's net debt is projected to reach $221.1bn by March 31, which is 39 percent of GDP, making it the second highest in the country as a percentage of GDP, behind only Newfoundland and Labrador.
Interest payments on the debt are set to increase by 1.2 percent to $9.8bn, reflecting the ongoing financial challenges and strategic efforts to manage the province's fiscal health.
