Quebec keeps 2015-16 goal for balancing the Canadian province's books

Wed Jun 4, 2014 6:04pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Marie-Pier Cayer

QUEBEC CITY Quebec (Reuters) - The new Liberal government of Quebec pledged on Wednesday to balance the Canadian province's books by 2015-16, sticking to the same timetable as the previous government of the separatist Parti Quebecois.

In presenting a budget for the 2014-15 fiscal year, it estimated a deficit for the year of C$2.35 billion ($2.15 billion), up from the C$1.75 billion gap forecast by the previous government in the budget it presented in February.

The Quebec Liberals took power in an April 7 general election, and because they have a majority of seats in the provincial legislature, passage of the budget is assured.

Quebec, the second-biggest provincial economy in Canada, faces the highest public debt load of any province.

Finance Minister Carlos Leitao, a former bank economist, sent a clear message to markets that his priority would be to reduce Quebec's debt and deficit.

He said that 90 percent of the effort required to eliminate the budget deficit would come from spending cuts, with the remainder coming from increased revenues, including higher taxes on tobacco and alcohol, but no income tax changes.

He said if the government did nothing, the province would face deficits of C$5.9 billion and C$7.6 billion this year and next.

"Spending continues to grow faster than revenue, which is the very definition of a structural deficit. The time has come to finally tackle this problem, before others force   Continued...

Quebec's Minister of Finance Carlos Leitao looks on before tabling his provincial budget at the National Assembly in Quebec City, June 4, 2014. REUTERS/Jacques Boissinot