In Quebec as well as in Ottawa, budgeting continues to be called hot iron. Nevertheless, the government orders revised the size of the deficits for the just-ended fiscal year.
In the monthly financial operations report released on Friday afternoon, Quebec’s Finance Ministry indicated that the size of the deficit should ultimately be $ 12 billion for the fiscal year ending March 31.
Hours earlier, the Trudeau government revealed an initial deficit of $ 314 billion, an unprecedented amount attributed to the economic shock from the COVID-19 pandemic. However, this forecast is lower than the $ 354.2 billion projected in the April budget.
On the Quebec side, this is the second time that the deficit projections have been revised downwards since the budget was introduced, on March 26, which predicted a $ 15 billion gap in public finances after payment to the Generations Fund.
“The data available to us during the final months of the 2020-2021 fiscal year are favorable, especially with regard to tax revenue,” Finance Minister Eric Gerrard said in a press release. That is why we are reviewing our initial estimate of the budget deficit. “
He added that the next monthly report will enable a “first income and expenditure assessment” for the fiscal year 2020-2021.
The improvement in the picture was attributed to three factors: a $ 1.3 billion increase in tax revenues – especially corporate income tax – an increase of $ 413 million in Ottawa for spreading high speed internet and the elimination of the $ 1.3 billion provision for economic emergencies.
After the first 11 months of the 2020-2021 fiscal year, Quebec has accumulated a deficit of $ 5.2 billion, which takes into account a deposit of $ 2.9 billion in the Generations Fund. If the Finance Ministry expects a deficit of $ 12 billion, it is because there will be “an acceleration in spending at the end of the fiscal year” and “important financial information” related to the health crisis “is still being counted.
It is noteworthy that the monthly report on financial operations does not progress on the state of public finances for the current fiscal year and the expected deficit of $ 12.3 billion. It can be adjusted down if the image continues to improve.
In his budget last March, Mr Gerrard decided to postpone a balanced budget for seven years, instead of five, in order to stimulate economic recovery and support the health system. Quebec will also have to consider the $ 6.3 billion structural deficit – the one that will remain after the pandemic –
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