Quebec sees balanced budget in 2015-16 after years of deficits

Thu Mar 26, 2015 5:27pm EDT
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By Allison Lampert

QUEBEC CITY, Quebec (Reuters) - The Canadian province of Quebec said on Thursday it will balance its books in 2015-16 following six consecutive years of deficits and vowed to continue to control government spending in the years ahead.

Quebec Finance Minister Carlos Leitao reiterated his forecast for a deficit of C$2.35 billion ($1.88 billion) in fiscal year 2014-15, ending March 31, unchanged from projections in his fiscal update last December.

In last April's provincial election, the governing Liberals had pledged to balance the budget once in power. The budget was Leitao's second since the Liberals took over from the separatist Parti Quebecois following the election.

Quebec, the second-biggest provincial economy in Canada, has one of the highest public debt loads of any province.

Leitao said the coming year's budget will be the first of five balanced budgets through 2020, as the predominantly French-speaking province continues to consolidate government services, while gradually introducing tax breaks for individuals and companies.

Leitao said his projections for future balanced budgets are credible even as the government faces headwinds from imminent negotiations with its large unionized sector.

"In my opinion, the five-year projections are very reasonable, very prudent, very conservative," Leitao, a former bank economist, told reporters.

In 2015-16, government spending on programs will increase by an anemic 1.2 percent, while revenues are forecast to grow by 4.4 percent.   Continued...