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 2013 update confirmed that these objectives will be maintained.
As at March 31, 2013, the gross debt stood at $191 756 million, equivalent to 53.6% 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 stood at $118 095 million, equivalent to 33.0% 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 $5 238 million.
|Book value as at March 31, 2012||4 277|
|Dedicated revenue in 2012‑2013|
|Book value as at March 31, 2013||5 238|
To achieve its objectives the government announced in the November 2012 budget that the following revenues will be paid into the Fund:
The government also announced a reduction in planned capital investments.
In addition, to offset the debt increase resulting from the deficits in 2013‑2014 and 2014‑2015, the government will make additional deposits into the Generations Fund as of 2016‑2017. These additional amounts will be drawn from the specific tax on alcoholic beverages and will represent additional deposits of $425 million per year.
Owing to the new revenue sources, which are over and above those currently dedicated to the Generations Fund, the Fund should reach $14.0 billion as at March 31, 2018.