29 March 2021
A little more than a year after the start of the pandemic and at a time when the rapid progress of the vaccination campaign suggests a way out of the crisis, the Minister of Finance, Eric Girard, today presented the Quebec Budget Plan – March 2021, which provides for measures totalling close to $15.0 billion over the next five years, including $5.2 billion starting this year, to :
- strengthen our health care system
- support student success and youth;
- accelerate growth and the transition to the new economy in Québec;
- support Quebecers.
Strengthening our health care system
The government has made significant efforts to support the health care system during the first two waves of the pandemic and continues to do so in the 2021-2022 budget by announcing investments of more than $10.3 billion over the next five years, including $2.9 billion this year, to extend the measures announced since March 2020 to manage the health crisis and to enhance health care and services for Quebecers
Supporting academic success and youth
Young Quebecers have been particularly affected by the pandemic and its impact. Several important aspects of their lives have been affected. That is why, in the 2021-2022 budget, the government is making them the focus of its priorities by announcing initiatives totaling $1.5 billion over the next five years so that each of them can develop their full potential.
The government wants to support young people from the time they start school until they enter the job market. The initiatives announced today aim to :
- support academic success
- support perseverance and graduation in higher education
- facilitate professional and social integration;
- promote the practice of sports and recreation.
Accelerating economic growth and the transition to the new economy in Québec
The government is maintaining its objectives for creating wealth and increasing Québec’s economic potential. In addition to major investments in education and higher education, the 2021-2022 budget proposes initiatives totaling $4.0 billion over the next five years to stimulate business investment and improve productivity in all regions in order to accelerate growth and the transition to Quebec’s new economy.
Increasing and accelerating infrastructure investments
The economic recovery depends in particular on investments in our public infrastructure. In this regard, the government is increasing investments in the 2021-2031 Quebec Infrastructure Plan (QIP) by $4.5 billion, from $130.5 billion to $135.0 billion. Nearly 60% of the plan’s investments are planned over the next five years to accelerate the economic recovery.
Ensuring the integrity and fairness of the tax system
The government is continuing its actions to ensure the integrity and fairness of the tax system. In particular, it will act to ensure that the QST is collected on goods brought in from abroad through distribution warehouses. Additional revenues of $1.8 billion are expected within five years.
Quebec’s economy will quickly return to cruising speed
The economy slowed considerably in 2020, but the outlook for 2021 and 2022 suggests a strong economic recovery. After an unprecedented decline in 2020, real GDP is expected to grow by 4.2 percent in 2021 and 4.0 percent in 2022.
The economic recovery will be driven by household consumption and residential investment, business investment and government stimulus packages. Although the recovery is already underway in the labour market, a return to full employment is expected by the end of 2022.
Structural deficit to be eliminated within seven years
The resilience of the Quebec economy in the face of the crisis and the scale of the support measures implemented by the government have made it possible to limit the deterioration of public finances and to begin the recovery. For 2020-2021, the budgetary deficit is stable compared to the situation forecast in November 2020 and reaches $15.0 billion before the use of the stabilization reserve. It will decline to $12.3 billion for 2021-2022 and $8.5 billion for 2022-2023.
The government is committed to not implementing any measures to reduce the budget deficit until Quebec has returned to its pre-pandemic employment level in two years. Thus, the return to a balanced budget is now expected in 2027-2028. The plan to return to a balanced budget will be based on the government’s commitment not to increase the tax burden, on growth in spending that is in line with revenue, on accelerated economic growth, and on an increased federal contribution to health spending.
In addition, the government is committed to maintaining payments to the Generations Fund.
Debt remains under control
The COVID-19 pandemic has put a stop to the decline in the debt burden. As of March 31, 2021, the net debt-to-GDP ratio will be 45.0%, which remains lower than the 47.9% as of March 31, 2017. The debt burden is expected to stabilize over the next few years, falling back from 2024-2025 with the gradual return to a balanced budget.
“For just over a year, the government has mobilized significant resources to manage the health crisis and support the public and businesses. We are continuing our efforts in this budget, which proposes several measures that will put Quebec back on the growth path it was on until early 2020.
We will restore a balanced budget in seven years, maintain payments to the Generations Fund, support the healthcare system and do everything possible to increase Quebec’s economic potential in order to emerge from this crisis even stronger. “
Eric Girard, Quebec Minister of Finance