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  Budget 2020-2021

Actions taken to reduce the debt

Debt reduction objectives

The Québec government has set debt reduction objectives that have been included in the Act to reduce the debt and establish the Generations Fund. For fiscal 2025-2026:

  • the gross debt cannot exceed 45% of GDP;
  • the debt representing accumulated deficits cannot exceed 17% of GDP1.

As at March 31, 2020, the gross debt will stand at $197.7 billion, or 43.0% of GDP. The objective of reducing the gross debt to 45% of GDP has thus been achieved. This objective has been achieved six years ahead of schedule.

A gradual and continuous reduction in the weight of gross debt is expected by 2024-2025. The gross debt-to-GDP ratio should stand at 39.5% as at March 31, 2025.

As at March 31, 2020, the debt representing accumulated deficits will stand at $95.9 billion, or 20.9% of GDP. As a proportion of GDP, the debt representing accumulated deficits began to decrease in 2013-2014 and will continue to fall over the coming years, reaching 17.0% as at March 31, 2023. The objective for reducing the debt representing accumulated deficits is therefore expected to be achieved in 2022-2023, or three years ahead of schedule.

Gross debt as at March 31 - Percentage of GDP

Gross debt as at March 31 (percentage of GDP)

  • 2014: 54.3
  • 2015: 54.3
  • 2016: 52.9
  • 2017: 51.5
  • 2018: 49.6
  • 2019: 49.1
  • 2020: 47.9
  • 2021: 47.1
  • 2022: 45.9
  • 2023: 45.0, objective achieved
  • 2024: 44.3
  • 2025: 43.5
  • 2026: 42.6
Debt representing accumulated deficits as at March 31 - Percentage of GDP

Debt representing accumulated deficits as at March 31 (percentage of GDP)

  • 2014: 33.5
  • 2015: 32.3
  • 2016: 31.2
  • 2017: 29.7
  • 2018: 27.9
  • 2019: 26.4
  • 2020: 24.9
  • 2021: 23.5
  • 2022: 22.1
  • 2023: 20.8
  • 2024: 19.4
  • 2025: 18.1
  • 2026: 16.8, objective achieved

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 solely 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.

In 2020-2021, deposits of dedicated revenues in the Generations Fund will amount to $2.7 billion.

As at March 31, 2021, the book value of the Generations Fund will stand at $11.7 billion.

Click here to find out more about the Generations Fund.

Generations Fund(millions of dollars)
Book value as at March 31, 2020 8 926
Dedicated revenues in 2020-2021
Water-power royalties
Hydro-Québec 763
Private producers 103
Subtotal 866
Indexation of the price of heritage electricity 388
Additional contribution from Hydro-Québec 215
Mining revenues 283
Specific tax on alcoholic beverages 500
Unclaimed property 15
Investment income 462
Total dedicated revenue 2 729
Book value as at March 31, 2021 11 655

 

1. As announced in the November 2019 economic and financial update, the government intends, for the purpose of monitoring this objective, to use the debt representing accumulated deficits within the meaning of the Public Accounts, that is, without the addition of the stabilization reserve. To that end, amendments will have to be made to the Act to reduce the debt and establish the Generations Fund.