Citing a drop in revenues entering state coffers, the Legault government announced a deficit of $7.5 billion, or $1.2 billion more than what had been forecast by its Minister of Finance.
On the eve of the long Confederation holiday, the Ministry of Finance announced at 4 p.m. Friday, by way of a press release, that Quebec had recorded a budget deficit of $7.5 billion, or $1.2 billion more than expected.
However, for the entire 2023-2024 fiscal year, Finance Minister Eric Girard forecast a deficit of $6.3 billion. Revenues are falling, we explain behind the scenes. People spent less because of rising interest rates.
“The financial situation noted in this report partly reflects the context of economic stagnation in which Quebec has been operating for some time,” said Minister Girard. “The increase in the deficit does not call into question the government’s plan to return to a balanced budget by 2029-2030 at the latest. We have been working since last March to optimize state action, and we are continuing to examine all government spending in order to identify sources of savings.”
Less taxes
The deficit represents 1.3% of Quebec’s GDP. In the meantime, stagnation and economic uncertainty continue to mark time.
According to the ministry, there was “a decrease of $594 million in personal income tax, mainly due to the less favourable evolution of capital gains and personal business income.”
There was also “a downward revision of $560 million to miscellaneous revenues, primarily attributable to lower-than-expected revenues from the sale of goods and services from government entities, particularly in the health sector.”
The government specifies that after the payments of revenues dedicated to the Generations Fund of $2 billion, the deficit stands at $5.4 billion.
memory deficit
Let us recall that in the last budget, Quebec announced a record deficit of $11 billion. François Legault’s government then decided to postpone the return to a balanced budget until 2030.
“The plan to return to balance will require real actions, but it is manageable,” declared Eric Girard last March.
Positive, he estimated that economic growth would return in the second half of 2024. His ministry still believes in this improvement. The impact of the drop in interest rates should be felt soon, we are told.
Quebec believes that purchasing power will increase for businesses and consumers.
of one noted following the processing of income tax returns for the 2023 tax year;
a downward revision of $560 million in miscellaneous revenues, mainly attributable to lower-than-expected revenues from the sale of goods and services from government entities, particularly in the health sector.
The results published today are preliminary and will be adjusted based on additional information obtained by the closing of the government’s financial statements. The final results will be presented in the fall in the 2023-2024 Public Accounts.
