In the March 2010 budget, the government announced debt reduction objectives. These objectives were included in the Act to reduce the debt and establish the Generations Fund in June 2010.
The November 2012 budget confirmed that these objectives will be maintained.
As at March 31, 2013, the gross debt should stand at $193.6 billion, equivalent to 54.2% of GDP. The government’s objective is to reduce the ratio of gross debt to GDP to 45% as at March 31, 2026.
As at March 31, 2013, the debt representing accumulated deficits should stand at $117.8 billion, equivalent to 32.9% of GDP. The government’s objective is to reduce the ratio of debt representing accumulated deficits to GDP to 17% as at March 31, 2026.
To reduce the debt, the government has the Generations Fund that was created in 2006. The amounts paid into the Fund, that come notably from the water-power royalties paid by Hydro-Québec and private hydro-electricity producers, will be used solely to repay the debt.
As at March 31, 2013, the book value of the Generations Fund should stand at $5.2 billion.
|Book value as at March 31, 2012||4 277|
|Dedicated revenue in 2012-2013 P (Preliminary results)|
|Book value as at March 31, 2013P (Preliminary results)||5 213|
To achieve its objectives the government announced in the November 2012 budget that the following revenues will be paid into the Fund:
The government will also reduce capital investments (a $1.5 billion annual reduction as of 2013-2014), which will help to reduce the debt growth.
An amount of $1 billion from the Generations Fund will be used in 2013-2014 to pay maturing borrowings.
The Generations Fund should stand at $13.6 billion as at March 31, 2018.