The 2015 Quebec budget aims to eliminate that province’s deficit by 2016 and reduce its debt, while accelerating capital spending and making strategic investments on critical infrastructure.
"After six consecutive years of deficits, our government is honouring its commitment: Quebec is finally returning to budget balance in 2015-2016," said Carlos Leitao, Quebec's finance minister, in a recent budget speech.
"The deficits accumulated over the past six years have added almost $16 billion to the debt. From now on, Quebecers will not go into debt by financing a portion of our current expenditures through an increase in the debt."
Leitao tabled the 2015-2016 budget on March 26 in Quebec City, which is centred on a plan to restore a sustainable balance in public finances. The government's consolidated revenue in 2015-2016 is forecast to be $100.1 billion, while consolidated expenditure is $98.6 billion.
Since the Liberal's tabled their first budget last June, the deficit has fallen to $2.35 billion for fiscal 2014-2015. Leitao plans to balance the budget in 2015-2016 and revenue is forecast to remain above expenditure over the next five years. This is the first time the Quebec budget has had a surplus since 2008 -2009.
The deficit has pushed the gross debt burden to 54.9 per cent of Gross Domestic Product (GDP) as of March 31, 2015. It is expected to be 54 per cent of GDP as of March 31, 2016, which is a decrease of 0.9 percentage point.
This is a major step toward achieving several debt reduction objectives by 2025-2026: 45 per cent of GDP for the gross debt; 17 per cent of GDP for the debt representing accumulated deficits.
The government is planning to invest $88.4 billion in the 2015-2025 Quebec Infrastructure Plan (QIP).
The reductions in the deficit and debt are being used to accelerate investment in $1.4 billion worth of projects in the QIP over the next four years. As a result, investments under the QIP are being increased by $300 million in 2015-2016, $900 million in 2016-2017 and $100 million for the two following years.
Public capital investments will amount to $9.9 billion in 2015-2016, which is a similar level to that in 2014-2015. Several major new projects will be considered under the 2015-2025 QIP including:
— completion of Highway 19;
— repairs to the deck of the Pont de Québec;
— addition to the Centre femme-jeunesse-famille of the Fleurimont hospital;
— extension of Highway 138 (Kegaska to La Romaine and Tête-à-la-Baleine to La Tabatière);
— addition to the Palais des congrès de Montréal.
Capital investments by government enterprises, primarily Hydro-Québec, will total $4 billion in 2015 -2016. When this is added to the $9.9 billion planned under the QIP, public investment will reach nearly $14 billion in 2015-2016.
The budget includes measures to stimulate the private investment including a maritime strategy, which will invest $1.5 billion by 2020 including:
— $200 million to accelerate investment in commercial port infrastructure;
— $400 million to promote the establishment of logistical hubs with the support of partners;
— $450 million to attract private investment by focusing on logistical and port infrastructure;
The government reported significant progress on its Plan Nord, which aims to stimulate the economic, social and environmental development of northern Quebec. Budget 2015-2016 allocated $425 million to the Fonds du Plan Nord over the next five years. The Société du Plan Nord began operations on April 1, 2015.
The new government corporation will coordinate the implementation of governmental guidelines for the Plan Nord, which includes the coordination of construction of infrastructure and, where necessary, install or operate them, alone or in partnership.