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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 GDP.

Given the substantial increase in the debt in 2020‑2021, arising from the significant deterioration in Québec's financial situation related to the public health crisis and support for the economy, these targets will be hard to achieve.

More light will be shed on the situation of the economy and public finances in the coming months. On the basis of this information, the government will examine whether there is a need to review the Act to reduce the debt and establish the Generations Fund, particularly with regard to the achievement of the targets set for 2025‑2026.

Reducing the debt burden remains a priority for the government. Québec is one of the most indebted Canadian provinces and it is not shielded from an eventual increase in interest rates.

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 $11.6 billion.

Click here to find out more about the Generations Fund.

Generations Fund(millions of dollars)
Book value as at March 31, 2020 8 899
Dedicated revenues in 2020-2021
Water-power royalties
Hydro-Québec 720
Private producers 99
Subtotal 819
Indexation of the price of heritage electricity 377
Additional contribution from Hydro-Québec 215
Mining revenues 244
Specific tax on alcoholic beverages 500
Unclaimed property 25
Investment income 473
Total dedicated revenue 2 653
Book value as at March 31, 2021 11 552