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MONTREAL \u2014 Quebec\u2019s finance minister presented an economic update recently that offered modest savings to taxpayers, as he painted an optimistic picture of the province\u2019s finances heading into an election year.<\/p>\n
Eric Girard\u2019s update includes decreases to payroll deductions for the provincial pension plan and parental insurance. The reductions, along with adjustments to how personal income taxes and social insurance benefits are indexed, are expected to represent an average gain of $182 per taxpayer in the 2026-27 fiscal year, he said.<\/p>\n
The savings to taxpayers may be modest, but they will come \u201cextremely quickly,\u201d he told reporters in Quebec City.<\/p>\n
\u201cJanuary 2026, it\u2019s very soon. So it will arrive at an opportune moment,\u201d he said.\u00a0<\/p>\n
Continuing to reduce Quebecers\u2019 tax burden will be a priority for the Coalition Avenir Qu\u00e9bec if the party wins a third term in the election scheduled for next fall, he added. Polls, however, indicate the CAQ would lose the election if it were held today.<\/p>\n
As well, Quebec is following in the footsteps of the federal government by cancelling the increase in the capital gains inclusion rate, which would have raised the rate to 67 per cent from 50 per cent.<\/p>\n
The deficit, meanwhile, is projected to be $12.4 billion this fiscal year, down from the $13.6 billion announced in the last budget.<\/p>\n
That figure, however, includes a legally mandated payment into a fund dedicated to paying down debt. Without that transfer, the province\u2019s deficit is forecast to be $9.9 billion, down from the $11.4 billion projected in March.<\/p>\n
Real GDP, adjusted for inflation, is expected to rise by 0.9 per cent in 2025 and 1.1 per cent in 2026. The March budget had forecast a GDP rise of 1.1 per cent in 2025 and 1.4 per cent the following year.<\/p>\n
Beginning on Jan. 1, the government will cut by 0.2 percentage points the contribution workers pay into the Qu\u00e9bec Pension Plan, and by 13 per cent the rate they pay for parental insurance. \u201cIt\u2019s because the pension plans are in good health \u2026 that we can reduce contributions,\u201d Girard said. \u201cWe\u2019re giving back to Quebecers what belongs to them.\u201d<\/p>\n
Taxes and social assistance benefits will be indexed at a rate of 2.05 per cent as of Jan. 1, which will raise the base annual rate for a person receiving social assistance to $9,600 from $9,408. While indexation is virtually automatic, Girard\u2019s office noted that prior to 2004 previous governments at times did not apply the full adjustment.<\/p>\n
Girard says the economy is showing encouraging signs, and the government is on track to return to a balanced budget by 2029-30.<\/p>\n
The economic update also includes more than $400 million over five years to support economic development in regions facing challenges, especially in relation to United States tariffs. More than $290 million of that will go to the agriculture, forest and fishing industries, where businesses will receive a temporary payroll tax holiday totalling $255 million.\u00a0<\/p>\n
The government is also adding $5 million to the amount allocated to emergency shelters for unhoused people, bringing the total budget to $26 million for the 2025-26 cold season.\u00a0<\/p>\n
Girard also announced that the $1.8 billion surplus in the province\u2019s green fund \u2014 earmarked for electrification and fighting climate change \u2014 will be transferred into a fund dedicated to paying down the province\u2019s debt. The economic update document says that decision was made \u201cin the interest of intergenerational fairness and with a view to ensuring the sustainability of public finances.\u201d<\/p>\n
The finance minister was also asked why the province didn\u2019t decide to use the surplus to reduce the gas tax. \u201cIf we use the fund\u2019s surplus, we\u2019ll increase government spending, and when we\u2019re in a deficit the last thing we want to do is increase spending,\u201d he said.\u00a0<\/p>\n
Opposition parties were quick to criticize the budget for not offering enough help to Quebecers who need it.\u00a0<\/p>\n
Liberal Leader Pablo Rodriguez described the deficit as \u201chistoric\u201d and said it showed poor management by a government that is \u201cpossibly the worst government in Quebec history.\u201d\u00a0<\/p>\n
He told reporters there \u201cisn\u2019t much of interest for Quebecers\u201d in the budget, adding that the aid for forestry workers is insufficient.<\/p>\n
Ruba Ghazal, the parliamentary leader of Qu\u00e9bec solidaire, said the financial respite for Quebecers only amounted to about $11 per month, or the amount of a \u201cBig Mac trio.\u201d The party\u2019s finance critic, Alejandra Zaga Mendez, accused the government of abandoning the fight against climate change by \u201cdiverting\u201d surpluses from the green fund to pay down debt.<\/p>\n
\u00a92025 The Canadian Press<\/strong><\/p>\n<\/p><\/div>\n