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The New Reality for Public Finances in Quebec and Canada The Conference Board of Canada, 41 pages, October 20, 2017 Executive Summary by Jean-Guy Côté , Daniel Fields , Mia Homsy , Simon Savard , Sonny Scarfone

The New Reality for Public Finances in Quebec and Canada

The Conference Board of Canada, 41 pages, October 20, 2017
Executive Summary by Jean-Guy Côté , Daniel Fields , Mia Homsy , Simon Savard , Sonny Scarfone

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This briefing note looks at why Quebec should stick to its current strategy of depositing substantial sums in the Generations Fund, even though the province has entered an era of budget surpluses and has managed to reduce its net debt-to-GDP ratio. Document Highlights Through the Generations Fund, Quebec has been able to reduce its net debt-to-GDP ratio. Meanwhile, it has entered an era of budget surpluses, and nothing indicates a change in the short term. However, with the federal government strategically favouring a return to deficits, Quebec’s heavy tax burden rules out the possibility of any increase in revenue should it become necessary to pay off the federal government’s deficit or repay the debt. In these circumstances, Quebec should not deviate from its current strategy of depositing substantial sums in its Generations Fund.

This briefing note looks at why Quebec should stick to its current strategy of depositing substantial sums in the Generations Fund, even though the province has entered an era of budget surpluses and has managed to reduce its net debt-to-GDP ratio.

Document Highlights

Through the Generations Fund, Quebec has been able to reduce its net debt-to-GDP ratio. Meanwhile, it has entered an era of budget surpluses, and nothing indicates a change in the short term. However, with the federal government strategically favouring a return to deficits, Quebec’s heavy tax burden rules out the possibility of any increase in revenue should it become necessary to pay off the federal government’s deficit or repay the debt. In these circumstances, Quebec should not deviate from its current strategy of depositing substantial sums in its Generations Fund.