Quebec budget update: A prudent, but necessary approach

Montreal, November 7, 2023 – Quebec Finance Minister Éric Girard has tabled a prudent budget update this morning, according to a researcher from the Montreal Economic Institute.

“Quebec’s economic and budgetary situation isn’t as rosy as we would have hoped,” said Gabriel Giguère, a public policy analyst at the MEI. “By maintaining its objective of balancing the budget within five years, Girard has resisted the temptation to plunge future generations deeper into debt.”

In accordance with the plan presented in the budget last March, the government of Quebec is still expecting to return to balance by 2027-2028.

The government has lowered its economic growth expectations, now predicting a real GDP growth of 0.7 per cent, as opposed to the 1.4 per cent estimate from last March.

This has a direct impact on the province’s tax revenues, which are now estimated to be $698 million lower than predicted.

Higher than anticipated interest rates are responsible for a $403 million increase in spending this year. This is equivalent to the entire provincial income tax bills paid by 64,647 Quebec taxpayers, or the population of the town of Mirabel.

“Higher interest rates have an impact on all our budgets, including the province’s,” added Giguère. “The $403 million increase in interest payments this year is money we can’t direct towards health care, education or to provide tax relief for individuals.”

Last March, the MEI warned the provincial government of the impact higher than anticipated interest rates could have on the province’s budget.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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