The first quarter of Quebec’s fiscal year ended with a $4.9-billion deficit as the COVID-19 pandemic forced expenses up by 11 per cent and sent revenues down 11 per cent.
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Sep 26, 2020 • • 1 minute read
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The first quarter of Quebec’s fiscal year ended with a $4.9-billion deficit as the COVID-19 pandemic forced expenses up by 11 per cent and sent revenues down 11 per cent.
The figure for April to June, published Friday, takes into account a $589-million contribution to the Generations Fund, a special fund meant to reduce the province’s debt. Last year, the quarter ended with an $824-million surplus.
All categories of own-source revenues — those not generated by government enterprises — were down, with business income tax revenues were down 33.7 per cent.
Revenues from publicly-owned enterprises dropped 60 per cent to $372 million as the pandemic forced temporary closure of casinos, gambling establishments and Loto-Québec sales. Lower energy consumption and a decrease in export prices affected Hydro-Québec revenues.
The $27.8-billion increase in expenses was mainly in the health and social services sector, which saw a 21.3-per-cent increase.
Federal transfers went up 15.6 per cent to $6.8 billion, in part because of transfers linked to healthcare.
Quebec plans to end the fiscal year with a $14.9-billion deficit, taking into account $4 billion to deal with the second wave of COVID-19. Quebec plans to turn to its stabilization reserve to balance the budget.
$2.3 billion for cities and transit
The provincial and federal governments will “as soon as possible” give $2.3 billion to Quebec’s municipalities and public transit agencies to help them deal with the challenges caused by COVID-19. The money will be split halfway between the two governments, with $1.2 billion going to transit, including $400 million already announced in June. Another $800 million will go to municipalities so they can “avoid tax hikes,” said Finance Minister Éric Girard.
The remaining $300 million will be a reserve for future use.
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