The Government of Quebec has forecast a record $11 billion deficit in its latest provincial budget.
The government blamed the budget deficit, which is likely to be the biggest in the province’s history, on a stagnant economy, last year’s forest fires, and billions of dollars in public sector wage increases.
The Quebec government tabled a $158 billion budget that projects an $11 billion deficit and a delay in balancing the provincial ledger until the 2029-30 fiscal year.
Quebec’s economy grew only 0.2% in 2023, and the budget forecasts that it will grow 0.6% in 2024 and 1.6% in 2025.
In addition to a sluggish economy and damage caused by forest fires, the Quebec government said it is dealing with salary increases for unionized public sector workers that have added $3 billion in annual expenses to its books.
Government officials acknowledged that the $11 billion deficit is likely the largest in Quebec’s history.
In the 2020-21 fiscal year, at the height of the pandemic, Quebec posted a then record $10.70 billion deficit.
The budget for the 2024-25 fiscal year includes $8.80 billion in new spending, with almost $5 billion going to healthcare and education.
The province has announced a separate plan to find nearly $3 billion in savings over the next five years, largely by reducing corporate subsidies.
Quebec’s net debt is projected to increase to $237.80 billion, an increase of $16.64 billion, when capital investments are included.
That increase would make Quebec’s debt the second highest among provinces as a percentage of GDP after Newfoundland.
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