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 June 4, 2014 budget confirmed that these objectives will be maintained.
As at March 31, 2014, preliminary results show that the gross debt stood at $198 052 million, equivalent to 54.3% 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, 2014, preliminary results show that the debt representing accumulated deficits stood at $120 074 million, 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, 2014, preliminary results show that the book value of the Generations Fund stood at $5 659 million.
|Book value as at March 31, 2013||5 238|
|Dedicated revenues in 2013‑2014|
|Total of dedicated revenues||1 121|
|Deposit from Territorial Information Fund||300|
|Total deposits||1 421|
|Use of the Generations Fund
to repay maturing borrowings
|Book value as at March 31, 2014P (preliminary results)||5 659|
To achieve these debt reduction objectives, the current provisions of the Act to reduce the debt and establish the Generations Fund stipulate that revenues from the following sources will be deposited in the Generations Fund :
Moreover, additional sums will be deposited in the Generations Fund as of 2016–2017. These additional deposits will be drawn from the specific tax on alcoholic beverages and will represent $400 million per year.
In addition, the government announced in the budget tabled June 4, 2014 that, as of 2017–2018, the fiscal outlook will make it possible to generate surpluses, half of which will be used to reduce the debt and the other half to ease the tax burden of Quebecers, by giving priority to the gradual elimination of the health contribution.
The Generations Fund should reach $16.7 billion as at March 31, 2019.