March 20, 2012 / 8:38 PM / in 6 years

Quebec to balance budget, invest in mining

OTTAWA (Reuters) - Quebec will balance its budget by 2013-14 after running a deficit of C$1.5 billion ($1.5 billion) in 2012-13, the government of the Canada’s second most populous province said in its budget on Tuesday.

Quebec's Minister of Finance Raymond Bachand shows different versions of his budget at his office in Quebec City, March 19, 2012. REUTERS/Mathieu Belanger

Quebec Finance Minister Raymond Bachand told the provincial legislature that the deficit for the fiscal year 2011-12 would come in at C$3.3 billion, or C$500 million less than forecast a year ago. The deficit includes an C$850 million contribution to the Generations Fund, which was established in 2006 to repay the gross debt.

The budget forecasts economic growth in the French-speaking province of 1.5 pct in 2012 and 1.9 pct in 2013, well below the national average forecast by the Bank of Canada.

Bachand also announced the creation of a new unit, Ressources Quebec, to take equity interests in promising mining projects. It will also advise the government on management of a new fund called Capital Mines Hydrocarbures (Hydrocarbons) dedicated to underground resources.

“These investments will enable us, as companies’ partners, to enjoy a larger share of the profits while taking on part of the associated risk,” Bachand announced.

Ressources Quebec will manage an equity portfolio of C$1.2 billion when fully implemented.

($1=$0.99 Canadian)

Reporting by Randall Palmer; Editing by Jeffrey Hodgson

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