TORONTO (Reuters) - The Quebec government said on Thursday it has cut its deficit by a greater than expected C$1.1 billion ($1.1 billion) this year, and expects to achieve a balanced budget within three years.
The Liberal government of the predominantly French-speaking Canadian province said its budget shortfall for the 2009-10 fiscal year, ended March 31, was C$3.2 billion instead of its projected C$4.3 billion, marking a deficit that was 25 percent lower than expected because of higher revenues.
But the province also expects to boost reserves because of the fragile global economic recovery, particularly in the United States. It expects to add contingency allowances over the next three fiscal years, which will push up deficit forecasts.
Quebec expects its deficit to stand at C$4.6 billion for 2010-11, C$3.2 billion for 2011-12 and C$1.4 billion for 2012-13.
In March, it had projected the deficit narrowing to C$2.9 billion in 2011-12 and to C$1.2 billion the following year. [ID:nN30169434]
Finance Minister Raymond Bachand said the Quebec government would meet its goal to eliminate the budget shortfall by 2013-14 through measures to further rein in spending growth.
The government said its budget target might also get help from stronger economic growth, additional federal transfers, or bigger gains from spending cuts. It said it has already pinpointed C$5.2 billion in measures to cut spending growth.
“The government’s plan is credible,” Bachand said in a statement.
“We have adopted a plan and, as anticipated, we are implementing it at a time when economic growth is occurring ... Budgetary balance will be restored within three years. We are staying on course,” he said.
Reporting by Ka Yan Ng; editing by Rob Wilson