The deficit evaporated in Quebec last year

When tabling his 2022-2023 budget plan, Finance Minister Eric Girard predicted a deficit of $6.1 billion for last year after the payment to the Generations Fund and the use of the stabilization reserve. It drops to 3.3 billion, in light of the most recent Monthly Financial Transactions Report, dated February 28, 2022.

<q data-attributes="{"lang":{"value":"fr","label":"Français"},"value":{"html":"Toutes les provinces ont révisé leurs revenus autonomes, a souligné M. Girard en entrevue à Radio-Canada. On est tous autour de 18 à 20%. This is higher than what we had expected.”,”text”:”All the provinces have revised their own-source revenues, underlined Mr. Girard in an interview with Radio-Canada. We are all around 18 to 20%. This is higher than we expected.”}}”>All the provinces have revised their autonomous revenues, underlined Mr. Girard in an interview with Radio-Canada. We are all around 18 to 20%. It’s higher than we expected.

In Québec, revenues have thus increased by 18.9% in 2021-2022, and those from corporate taxes, by 51.9%.

The increase in these revenues is attributable to stronger than expected progress in economic growth. Nominal gross domestic product (which does not take inflation into account) jumped to 13.1%, 1.8 percentage points higher than projected in the budget.

A balanced budget, or even a surplus, could have been achieved without the $3.2 billion intended to pay Quebecers $500 to deal with inflation and infrastructure transfers totaling $1.4 billion for the blue line, particularly.

« The results for 2021 are exceptional and the start of 2022 is very good, but yes there is uncertainty for 2023. »

A quote from Eric Girard, Minister of Finance of Quebec

What does 2022-2023 hold for us?

Minister Girard indicates that part of the $2.8 billion budget improvement could be recurringwhich could improve the balance over the whole horizon of the next five years. The return to balance could therefore occur sooner than in 2027-2028.

But inflation, rising interest rates, supply issues, the war in Ukraine and financial market volatility all point to more uncertainty this year.

The economy has a one in three chance of going into recession within the next year, according to Eric Girard. We are not doing any special preparation for these potential difficulties, he maintains, but we have a prudent and responsible budget that allows Quebec to be economically resilient and financially solid.

The Minister did not want to give any indication as to the possibility of new one-off aid to limit the effect of the meteoric rise in prices at the pump. On the other hand, he reports that revenue from gas taxes for the government has a marginal effect on public finances, among other things because motorists consume less fuel.

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