(Quebec) The fiscal picture suddenly became less bleak. Barely a month after scheduling its budget, Quebec announced that the deficit was thawing from 15 billion to 13.3 billion for the fiscal year that just ended.
In its monthly report on financial operations published on Friday, the Ministry of Finance clarified that “based on the latest available information, an upward adjustment of $ 1.8 billion is expected in the budget balance for the period 2020-2021,” for the fiscal year that ended on March 31.
Tax revenue – and especially corporate tax – increased more than expected at the start of the year, allowing the government to raise $ 712 million more than expected.
The contingency reserve will not be used fully, reducing the deficit by $ 625 million.
Finally, Ottawa’s $ 413 million increase in high-speed internet deployment in all regions explains why the budget gap is less deep.
Quebec has not specified the impact of this announcement on the fiscal state for the current fiscal year, 2021-2022. But there is a good chance that the 12.3 billion deficit planned in the March 25 budget will also be revised down.
In Secretary Eric Gerrard’s office, we agree that the effect “could be positive,” but we add that time will only be given at the time of economic modernization in the fall.
We must not forget that the $ 6 billion in five years expected by the federal government as compensation for the creation of the Pan-Canadian Child Care Program “will solve a small part of the government’s financial problem,” said Prime Minister Francois Legault. April 20. We’re talking about just under 1 billion in the first year and up to 1.9 billion by 2025-2026. This is another fact that will positively amend Legault’s government expectations.
In its latest budget, Quebec runs a 6.3 billion “structural” deficit, a deficit that will remain after the health crisis. He postponed his return to balanced budgets for seven years instead of five to focus his efforts on reviving the economy and improving the healthcare system.