Quebec's Finance Minister, Éric Girard, presented this afternoon the most challenging budget since taking office in October 2018, with an expected deficit of 11 billion dollars for the upcoming fiscal year, 2024 - 2025.

Girard said that, in real dollars, this deficit could be the highest in Quebec's history.

This deficit represents nearly four times what was planned in the 2023 - 2024 fiscal year's budget, when the government expected a deficit of 3 billion dollars for the next fiscal year.

It is noted that at the peak of the COVID-19 pandemic, in the 2020 - 2021 fiscal year, the deficit reached 10.7 billion dollars.

Therefore, François Legault's government is setting aside the plan that would have allowed it to return to a balanced budget by the 2027 - 2028 fiscal year, and confirmed that a new plan will be introduced in the 2025 - 2026 fiscal year aiming to set a schedule to return to a balanced budget by the 2029 - 2030 fiscal year at the latest.

Meanwhile, the Coalition Avenir Québec government will take improvement measures to achieve savings of about 3 billion dollars over five years. For example, the government intends to reduce tax assistance to companies.

However, the government will need to use its imagination in the coming years to accommodate what it presents as a "structural" deficit which, according to its forecasts, will reach 4 billion dollars starting from the 2026 - 2027 fiscal year.

The budget presentation today comes in a "difficult" economic context, according to the Quebec Finance Minister.

Quebec's GDP, which was expected to grow by 0.6% in 2023, only grew by 0.2% in the end.

This year does not look much better. After the government expected, when presenting its last budget a year ago, economic growth of 1.4% in 2024, it lowered its forecasts to 0.7% in the economic update in November and to 0.6% in the budget presented today.

On the revenue side, Quebec will suffer significantly from reduced federal transfers, which will decrease from 31.3 billion dollars to 29.4 billion dollars next year, a 6% decrease that can be explained, among other things, by a decrease in "equalization payments".

The Quebec government will also suffer a decline in fees paid to it in the 2023 - 2024 fiscal year by Hydro-Québec, the province's public electricity company, which has seen a decrease in its export volume.

These two factors largely explain why the state's revenues increase by only 2.7% in the 2024 - 2025 fiscal year, while expenses will rise by 4.4%.

In the 2024 - 2025 fiscal year, the Quebec government intends to increase spending on health and social services by 4.2%, reaching a total of 61.9 billion dollars. These expenses rank first in terms of importance.

In the same fiscal year, spending on education will increase by 9.3% to a total of 22.4 billion dollars, and on higher education by 3.5% to a total of 11 billion dollars.

There is also a slight increase in debt servicing which, at 9.8 billion dollars, remains the fourth largest item in Quebec’s expenses after health, education, and higher education.