Quebec runs historic $11B deficit in budget that prioritizes health, education

Quebec Finance Minister Eric Girard delivered Tuesday the most challenging budget of his mandate with a projected $11-billion deficit for the next fiscal year.

He said that, in real dollars, it could be the highest in the province's history.

The deficit for 2024-25 is more than three times higher than what the government had forecast for 2023-24.

Of the latest projected deficit, $4 billion is structural, Girard said, and the rest is related to new spending and managing the province's debt. He attributed increased spending to expenses that were considered temporary during the pandemic, but have since become permanent.

New collective agreements with the public sector will also lead to a hike in expenses over the next five years.

«Right now, we have no growth,» Girard said, noting a hike in interest rates over the last year and other difficult economic conditions.

«We had forest fires, we had reduced electricity production because of water shortage and we still managed to grow 0.2 per cent. That's a testament to the resiliency of the Quebec economy.»

As expected, the government is postponing its deadline for paying off Quebec's debt. It hopes to achieve a balanced budget by 2029-30 — two years later than it had planned last spring.

The province's economy will be far from keeping up with government spending for the foreseeable future. For the next five years, the province predicts spending will outpace revenue.

Girard said next year he will present his plan to get Quebec out of the red. But this year, his budget prioritizes health care and education.

For 2024-25, health and social services spending stands to increase by 4.2 per cent, to a total of $61.9 billion — the largest slice of the budget pie.

Education spending is increasing