Quebec: Budget 2021. Still a Long Way to Go to Balance the Budget

The 2021 budget not only provides an update on COVID-19’s impact on Quebec’s public finances, it also gives a glimpse of what comes next. As we suspected, it will take several years for Quebec’s budget to recover from this extraordinary shock. The Ministère des Finances is still projecting a $15.0B budget deficit for 2020–2021, identical to the deficit presented in last November’s update. Some of the deficit will be dealt with on the books with the amount remaining in the stabilization reserve, $8.8B. For fiscal 2021–2022, the deficit has been increased from last fall’s estimates. It goes from $8.2B to $12.3B, which is still lower than the projected deficit for 2020–2021. The budget deficit should gradually decrease after that. However, it will take until 2027–2028—seven years—to get it back to zero. This is longer than the period currently permitted by the Balanced Budget Act.