Debt reduction targets

The Act to reduce the debt and establish the Generations Fund was adopted in 2006. By reducing the debt burden, it aims to ensure a prosperous tomorrow for future generations.

Since 2010, the Act stipulates that for fiscal 2025‑2026, the gross debt must not exceed 45% of GDP, while the debt representing accumulated deficits must not exceed 17% of GDP. These new targets were set following the 2008 financial crisis and changes to government accounting, which made it impossible to reach the targets established in 2006.

As at March 31, 2023, the gross debt-to-GDP ratio will stand at 40.4%, which is below the 45% target. The accumulated deficit debt-to-GDP ratio will stand at 19.3%.

Setting a new objective

The government intends to propose changes to the Act to reduce the debt and establish the Generations Fund in Budget 2023‑2024. A new debt reduction objective covering the next 10 or 15 years will then be set.

The target will need to consider the challenges facing Québec now and those it will face in the coming years. Among these are an aging population, GHG reduction and Québec’s public infrastructure needs.

To reduce the debt, the government will continue to deposit significant amounts annually to the Generations Fund. Deposits in the Generations Fund help reduce the debt and, therefore, to improve intergenerational fairness.

The Generations Fund

To achieve these debt reduction objectives, the government established the Generations Fund in 2006. The sums accumulated in the fund are dedicated exclusively to repaying the debt. The main revenue sources dedicated to the Generations Fund are as follows:

• water-power royalties paid by Hydro-Québec and private producers of hydroelectricity;
• revenue generated by the indexation of the price of heritage electricity;
• mining revenues;
• an amount derived from the specific tax on alcoholic beverages;
• investment income.

Deposits in the Generations Fund help reduce the debt and, therefore, to improve intergenerational fairness.

In 2022-2023, deposits of dedicated revenues in the Generations Fund will amount to $3.3 billion.

As at March 31, 2023, the book value of the Generations Fund will stand at $19.1 billion.

Find out more about the Generations Fund.

Generations Fund (millions of dollars)