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, 2019, the gross debt stood at $199.1 billion, or 45.8% of GDP.

The gross debt will rise in absolute terms over the coming years, particularly because of capital investments, but its weight in the economy will continue to decline. The objective of reducing gross debt to 45% of GDP will be achieved in the current fiscal year, or six years earlier than planned.

As at March 31, 2019, the debt representing accumulated deficits within the meaning of the Public Accounts stood at $100.4 billion, or 23.1% 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, to 16.2% as at March 31, 2024. The objective for reducing the debt representing accumulated deficits will be achieved in 2023-2024, or two years earlier than planned.

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)

  • 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 2019-2020, payments of dedicated revenues in the Generations Fund reach $2.7 billion.

As at March 31, 2020, the book value of the Generations Fund will stand at $9.0 billion.

Click here to find out more about the Generations Fund.

Generations Fund(millions of dollars)
Book value as at March 31, 2019 8 293
Dedicated revenues in 2019-2020
Water-power royalties
Hydro-Québec 741
Private producers 102
Subtotal 843
Indexation of the price of heritage electricity 303
Additional contribution from Hydro-Québec 215
Mining revenues 264
Specific tax on alcoholic beverages 500
Unclaimed property 20
Investment income 526
Total dedicated revenue 2 671
Use of the Generations Fund to repay borrowings – 2 000
Book value as at March 31, 2020 8 964

 

1. For the purpose of monitoring this objective, the government intends to use the debt representing accumulated deficits within the meaning of the Public Accounts, that is, without the addition of the stabilization reserve, as this indicator is more in line with the actual and projected budgetary situation.