Quebec Budget 2025-2026: The White House invites itself to the salon Rouge
THE CANADIAN PRESS/Karoline Boucher
A record deficit of $13.6 billion and a return to balance in 2029-2030.
Some key numbers and highlights
Despite the uncertainty, the government reiterates its commitment to maintaining sound public fiscal management.
Economic growth: The real GDP growth in Quebec will be 1.1% in 2025 and 1.4% in 2026. Economic growth will be hindered by uncertainty surrounding tariffs.
Return to budget balance: The government presents a plan for returning to budget balance within five years, by 2029-2030.
The financial framework includes a contingency provision of $8.5 billion over five years.
Accounting deficit before transfers of revenues dedicated to the Generations Fund: $11.4 billion in 2025-2026.
Deficit according to the Balanced Budget Act, i.e., after transfers of revenues dedicated to the Generations Fund, will be $13.6 billion.
Debt: As of March 31, 2025, the net debt ratio will be 38.7% of GDP. A gradual reduction of this ratio is expected starting in 2028-2029, with a new reduction target of 32.5% of GDP by 2037-2038.
Analysis
The image was striking: the most deficit-ridden budget in history – $13.6 billion – was read in the Salon Rouge, exactly the colour of the ink with which it was written.
The new occupant of the White House has disrupted forecasts, and his tariff threats are darkening Quebec's economic outlook. In the context of a tariff war, the government is investing heavily in business aid and economic stimulus measures.
This budget was written with the assumption that ‘the tariffs imposed by the United States could be adjusted in the coming months, that their effects would average out to tariffs of 10%, and that they could be in place for a transitional period of about two years.'
In anticipation that this assumption may no longer hold, the government can rely on a contingency provision of $8.5 billion.
Finance Minister Eric Girard described the budget as 'complex.' It is quite simple: it includes measures totalling $12.3 billion over five years to support wealth creation and Quebecers.
The business aid measures, mostly in the form of loans, were already known with the presentation of this budget; the government is now adding more targeted measures. Beyond short-term measures, the government aims to lay the foundations for the economy of the future by focusing on innovative research and development.
Return to balance: the path is laid.
Quebec is determined to end nine consecutive years of deficits and remains focused on the goal of achieving zero deficits by 2029-2030. The identified effort corresponds to an amount of $6 billion over the 2029-2030 horizon, and the government is counting on an improvement in the economic situation to bridge the remaining gap.
The government plans a spending increase of 1.9% until 2029-2030, well below system costs. Before today, the government was already tightening its belt; it will do so even more in the coming years.
Additionally, the government is 'improving the tax system' – read here a cleanup of a series of tax credits – which will free up $3 billion over five years. Others will contribute to electric vehicle owners and certain tax credit beneficiaries.
For the rest, a large part of the effort will be made by the state:
Maintaining the hiring freeze in ministries outside the health and education networks and information resources.
Plan to optimize spaces and rents of government administration.
Governance and management of government information resources.
Creation of new purchasing groups.
Politically, the CAQ will thrive with this budget:
The record deficit in absolute figures is justified in the context of a trade war.
The measures to return to zero deficit stem from government efforts.
By increasing its PQI by $11 billion, it will be able to finance infrastructure projects that are highly favoured by the deputies.
Now, with meagre spending growth, many will accuse it of administering an austerity regime.
After getting us used to flamboyant and electorally enticing measures, Minister Girard is now guided by prudence and sobriety. With 18 months to go before an election, he resists the temptation to indulge in clientelism. Anyway, he no longer has the means to do so.
Instead, he has chosen to sharpen his weapons and bring out the heavy artillery. After all, the minister is going to war. A trade war.
Principal measures
Major fiscal and budgetary measures
The budget provides for $12.3 billion in additional initiatives over the next five years.
Stimulate wealth creation $5.4 billion:
$4.1 billion to support and energize Quebec's economy by providing transitional aid to businesses affected by U.S. tariffs and granting financial assistance in the form of loans, representing a liquidity injection of $1.6 billion.
Support the realization of investment projects by extending accelerated depreciation measures, promoting the realization of business projects, continuing the construction training offensive, and encouraging market diversification.
Promote innovation in strategic sectors by renewing the Quebec Life Sciences Strategy, supporting research and innovation in businesses in priority sectors, and developing the innovation zone.
Modernize public services to increase efficiency.
Help high-potential SMEs.
Propel young innovative companies with high growth potential.
759 million dollars to promote the contribution of regions to wealth creation:
Continue initiatives for better connectivity.
Enhance our critical and strategic minerals by adopting a new Quebec Plan for the valorization of critical and strategic minerals for the period 2025-2030.
Support the forestry sector by promoting the diversification of the forest products industry and innovation.
Continue support for the tourism sector by supporting festivals and tourist events.
Support Quebecers through initiatives totalling $6.8 billion:
$3.9 billion to ensure better delivery of health care and social services.
$1.1 billion to encourage education and youth development.
$550 million to promote the well-being of individuals.
$717 million to enhance Quebec culture and identity, including increased funding for the Quebec Arts Council and continued support for cultural businesses through SODEC.
$636 million to support communities.
Efforts are being made to improve the tax system, representing $3 billion over five years:
To optimize tax assistance to businesses.
By targeting higher value-added activities in the IT sector.
By refocusing the resource tax credit on critical and strategic minerals.
The Quebec Infrastructure Plan (PQI) 2025-2035 has increased to $164 billion, an increase of $11 billion.
Next Steps:
Budget debate (25 hours).
Study of budgetary credits in parliamentary committees (100 hours) starting in April.
Adoption (in May).