Quebec delays balancing its budget; opposition irked

Thu Nov 28, 2013 5:51pm EST
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By Louise Egan

(Reuters) - It will take Quebec two years longer than promised to eliminate its budget deficit, the government of Canada's second-largest provincial economy said on Thursday, earning the rebuke of opposition politicians and raising the prospect of a 2014 election.

The separatist government of predominantly French-speaking Quebec had said it would balance the budget in the current 2013-14 fiscal year, but now expects that to happen in 2015-16, said the provincial finance minister, Nicolas Marceau.

He forecast a budget deficit of C$2.5 billion ($2.4 billion) this year and a shortfall of C$1.75 billion in 2014-15, citing weak growth and disappointing revenues.

Quebec would have had to raise taxes or impose broad spending cuts to achieve its original budget target for this year, Marceau said.

"Given the current economic situation, we could have only dogmatically pursued this objective at the cost of measures that would have inhibited economic growth," he said.

"We are, therefore, making the responsible choice of postponing the return to a balanced budget until 2015."

The two main opposition parties lambasted the governing Parti Quebecois for its handling of the economy, which is seen growing 0.9 percent this year and underperforming the rest of Canada.

Based on the new fiscal projections, they said they would vote against the government's March 2014 budget. A vote against the budget would be a non-confidence vote and would automatically trigger an election.   Continued...

Quebec Minister of Finance and Economy Nicolas Marceau waits for Premier Pauline Marois to arrive and release their new economic policy in Montreal October 7, 2013. REUTERS/Christinne Muschi