UPDATE 2-Quebec promises balanced budget by 2013-14

Tue Nov 20, 2012 5:39pm EST
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* Canadian province still aims to balance books by 2013-14

* Cuts, tax hikes to curb deficit to C$1.5 bln in 2012-13

* Minority PQ gov't needs opposition support to pass budget

* Bond markets little changed following budget

By Louise Egan

QUEBEC CITY, Nov 20 (Reuters) - The Canadian province of Quebec said on Tuesday it will eliminate its budget deficit by 2013-14 through spending restraint and higher taxes on the rich, but delayed plans to raise mining royalties.

Finance Minister Nicolas Marceau promised to whittle down the budget shortfall in the current 2012-13 fiscal year to C$1.5 billion ($1.5 billion), or 0.4 percent of gross domestic product, and balance the books in the following year, as was widely expected, ending a four-year string of deficits.

The current year deficit excludes a C$1.8 billion fiscal cost of shutting down the Gentilly nuclear power plant.

About two-thirds of the effort towards achieving the target comes from limiting growth in government spending, with the rest coming from modest tax hikes and other measures such as cracking down on tax evasion and cutbacks at state-run enterprises.   Continued...