QUEBEC CITY (Reuters) - Quebec posted a higher-than-expected budget surplus for the fiscal year ended March 2019, helped by strong economic growth in Canadian province, its finance minister said on Thursday in an update that forecast a current fiscal year surplus.
Quebec’s government estimated a C$1.4 billion ($1.06 billion) surplus for fiscal 2019-20, Finance Minister Eric Girard said. For calendar 2019, real Gross Domestic Product is expected to be 2.4%, up from 1.8% in a previous estimate, he added.
The government posted a budget surplus of C$4.8 billion for fiscal 2018-2019 compared with its previous estimate of C$2.5 billion.
“The economic performance of Quebec is remarkable,” Girard told reporters in Quebec City, but he cautioned that economic growth was expected to be a more modest 1.8% in 2020.
“All sectors are strong except for exports,” Girard added, noting Quebec has seen stronger private investment in the province.
Girard said the surplus during the current fiscal year would be used largely on climate change initiatives, and to reduce the debt.
In a sign of improved fiscal discipline, Canada’s second most-populous province behind Ontario said it would achieve its target of reducing the gross debt burden to 45% of GDP at March 31, 2020, six years ahead of schedule.
Quebec pays less to borrow in the bond market than Ontario, which on Wednesday projected a deficit of C$9.0 billion for the current fiscal year.
Quebec’s center-right CAQ government, which formed a majority government last year, has committed to delivering four additional fiscal years of balanced budgets, despite a slowing global economy.
Girard also said an additional C$857 million will be invested, starting in 2019, on social programs like family allowances.
“We are giving money back to Quebecers with a responsible fiscal plan,” he said.
Reporting by Allison Lampert; Editing by Chris Reese and Sonya Hepinstall; Editing by Richard Chang