Repetition deficits have a price: the Quebec Credit Credit established by the Standard & Poor’s agency (S&P) was lowered on Wednesday, from Aa- à A+.
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The province of Quebec has been demoted due to “persistent operating deficits”, underlines S&P, which explains that a “conjunction of factors, including the slowdown in population growth, the increase in wage expenses and the decline in income, should weaken the financial situation of Quebec over the next three years, with persistent exploitation and significant deficits.”
S&P underlines that these factors were present even before increased economic uncertainty linked to customs tariffs.
This discount occurs after the minister of Finance had unveiled a record deficit of $ 13.6 billion in March.
“The stable prospects reflect our forecasts according to which the province will continue to produce operating deficits and major deficits after fixed assets over the next two years, which will increase the debt funded by taxes to 218% of operating income by the 2028 fiscal year”, underlines S&P.
Hydro-Québec also decorated
The agency has also lowered the hydro-Québec credit rating, which also goes from AA- to A+.
-S&P underlines that the province’s decarbonization plan will require investments of 150 billion Canadians from the Crown Company, which will increase the level of its debt.
“On March 25, despite the uncertainty associated with American economic policies, we filed a return plan for the budgetary balance in compliance with the Budgetary balance law. We are going to carry out this plan and reduce the weight of long -term debt, “said finance minister Eric Girard in a statement.
Taxpayers receive
“It very concretely demonstrates that the Quebec government manages its public finances. It is a very clear message, ”says Gabriel Giguère, analyst in public policies at the IEDM.
The big question was not to know if it was going to happen, but when, given the succession of increasingly important deficits in the past four years, he said.
Quebec’s net debt is currently $ 235.8 billion. As of March 31, 2025, and the government plans in its budget to add $ 20 billion in debts during the current year.
Quebec taxpayers will pay 9.7 billion in interest on debt this year, slightly more than the total budget of the family ministry.
The amount paid in service (interest) of the debt is equivalent to $ 1 out of 5 sent to the government in individual tax, according to the IEDM.
“What we say to Quebecers is that we continue to go into debt as with a credit card, so we have to pay more and more interest. It is money that we cannot put in the pockets of citizens, or use to improve health care or education, “says Gabriel Giguère.
