UPDATE 1-Quebec sees balanced 2016-17 budget, repeats debt-reduction targets

Thu Mar 17, 2016 4:51pm EDT
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(New throughout, adds details, background, comments from finance minister and bank economist)

By Allison Lampert

QUEBEC CITY, March 17 (Reuters) - Quebec will balance its books for the second year in a row in 2016-2017, the Canadian province said on Thursday, while reaffirming prior debt-fighting commitments for the years ahead.

Quebec, which confirmed its first balanced budget in fiscal 2015-16 after six consecutive deficits, has emerged with British Columbia as the only Canadian provinces expecting balanced books in 2016-2017, Finance Minister Carlos Leitao said.

"This marks a major milestone for our government," Leitao said. "We've gotten our fiscal house in order."

Quebec, Canada's second-largest province, said C$2 billion ($1.54 billion) in its C$100 billion budget would go towards a fund aimed at reducing the debt.

Quebec introduced modest spending for social programs and infrastructure and said it would reduce its debt burden from 55 percent of gross domestic product this year, to 45 percent of GDP in 2026.

Earlier, the province had expected to reduce the ratio to 54 percent of GDP this year, but had to change its forecast after Statistics Canada presented revised GDP figures.

Elected in 2014, the Liberals have pledged balanced budgets from 2015 through 2020. Quebec has one of the highest public debt loads of any province.   Continued...