Ministère des Finances
Ministère des Finances
Ministère des Finances
Québec has made remarkable progress in reducing its debt load in recent decades, but it remains high nonetheless. Reducing the debt burden is a priority for the government.
In addition to promoting greater intergenerational fairness, reducing the debt burden contributes positively to economic growth by creating a climate of confidence conducive to private investment and higher productivity.
The Act to reduce the debt and establish the Generations Fund was adopted in 2006. By reducing the debt burden, it aims to ensure long-term financing for the government’s main missions and a prosperous tomorrow for future generations.
As at March 31, 2024, net debt will stand at 39.0% of GDP. The government intends to reduce it to 30% of GDP by 2037‑2038.
The government also aims for the net debt burden to be 33% of GDP by 2032‑2033. This is an intermediate target.
At a time when it is difficult to forecast how the economy will change over the long term, the government has provided an interval for these two targets. These two targets were incorporated in the Act to reduce the debt and establish the Generations Fund in December 2023.
The government intends to achieve these targets by restoring a balanced budget, continuing to make payments to the Generations Fund and implementing measures to accelerate economic growth.
| Year | GDP (%) |
|---|---|
| 2017 | 48.9 |
| 2018 | 45.9 |
| 2019 | 42.9 |
| 2020 | 40.9 |
| 2021 | 43.1 |
| 2022 | 39.1 |
| 2023 | 38.3 |
| 2024 | 39.0 |
| 2025 | 40.3 |
| 2026 | 41.0 |
| 2027 | 40.6 |
| 2028 | 40.0 |
| 2029 | 39.5 |
Since 2006, the Generations Fund is an important pillar of the debt reduction strategy.
In 2023‑2024, revenues dedicated to the Generations Fund will stand at $2.1 billion. They will reach $2.7 billion in 2028‑2029 and $4.2 billion in 2037‑2038.
As at March 31, 2024, the balance of the Generations Fund will stand at $18.5 billion, which is 8.4% of net debt.
Budget 2024‑2025 provides for an additional deposit of $400 million to the Generations Fund in 2024‑2025, drawn from a portion of the accumulated surplus of the Territorial Information Fund of the Ministère des Ressources naturelles et des Forêts. This deposit will be withdrawn in 2024‑2025, in order to directly repay maturing borrowings.
Withdrawals of $4.4 billion and $2.5 billion will be made in 2024‑2025 and 2025‑2026, respectively, to repay maturing borrowings. These withdrawals amounted to $2.5 billion in 2023‑2024.
These withdrawals serve to reduce the financing program and alleviate debt service in the current context of high interest rates. With the cost of new borrowings currently higher than the average cost of debt, debt service is coming under upward pressure.
| 2023‑2024 | 2024‑2025 | 2025‑2026 | 2026‑2027 | 2027‑2028 | 2028‑2029 | |
|---|---|---|---|---|---|---|
| Book value, beginning of year | 18 911 | 18 492 | 16 714 | 16 433 | 18 852 | 21 406 |
| Dedicated revenues | ||||||
| Water‑power royalties | ||||||
| Hydro‑Québec | 730 | 750 | 789 | 884 | 907 | 906 |
| Private producers | 111 | 117 | 120 | 123 | 125 | 128 |
| Subtotal | 841 | 867 | 909 | 1 007 | 1 032 | 1 034 |
| Additional contribution from Hydro‑Québec | 650 | 650 | 650 | 650 | 650 | 650 |
| Investment income | 590 | 705 | 660 | 762 | 872 | 987 |
| Total dedicated revenues | 2 081 | 2 222 | 2 219 | 2 419 | 2 554 | 2 671 |
| Deposit from the Territorial Information Fund | — | 400 | — | — | — | — |
| Total deposits | 2 081 | 2 622 | 2 219 | 2 419 | 2 554 | 2 671 |
| Use of the Generations Fund to repay borrowings | –2 500 | –4 400 | –2 500 | — | — | — |
| Book value, end of year |
18 492 | 16 714 | 16 433 | 18 852 | 21 406 | 24 077 |
| % of net debt | 8.4 | 7.0 | 6.5 | 7.3 | 8.1 | 8.9 |
| % of GDP | 3.3 | 2.8 | 2.7 | 3.0 | 3.3 | 3.5 |
Québec’s credit rating is evaluated by six credit rating agencies.
In 2023, all agencies have confirmed Québec’s credit rating with a stable outlook.
To learn more about Québec’s debt and the Generations Fund, see the section entitled The Québec Government’s Debt: section The Québec Government’s Debt, Québec Budget Plan - March 2024 of the the Québec Budget Plan – March 2024.