Quebec Government Prioritizes Health & Education in its Budget

In the Québec Budget Plan published in late March 2024, the government is prioritizing funding for health and education services. It is strengthening its support for Quebecers and communities, and acting on economic priorities while taking steps to optimize government action. It is presenting a fair and transparent portrait of the state of public finances and reiterating its firm commitment to restoring fiscal balance after deposits in the Generations Fund.
A plan will be tabled when Budget 2025-2026 is released, with fiscal balance being achieved by 2029-2030 at the latest.

>> Québec’s economic situation

The global economy proved resilient in 2023, particularly due to the strong performance of the U.S. economy. The difficulties are nevertheless intensifying as the effects of tighter financial conditions become more pronounced and growth turns sluggish in most economies.

The early months of 2024 will remain difficult. This period of economic weakness will continue to lower pressure on prices. Central banks will start easing their monetary policies gradually as of the second quarter of 2024 in response to moderating inflation in particular.

— More stable prices and more advantageous credit conditions will foster the recovery of economic activity in the second half of 2024 and in 2025.

As a result, real GDP growth is expected to accelerate in 2025 in most economies.

In Québec, real GDP stagnated in 2023. Overall, production rose by just 0.2% for the year as a whole. However, the relative weakness of the economy did not spread to all industries. Moreover, the production declines observed are partly attributable to temporary factors, including major forest fires.

The economy stagnated in 2023, but the labour market remained resilient, as job creation continued (+2.3% in 2023). In addition, Québec’s unemployment rate, at an average of 4.5% in 2023, remained well below that for Canada as a whole (5.4%) and the lowest among the provinces. Overall, Quebecers’ financial situation is solid.

• Between 2018 and 2023, household disposable income  in  real terms  rose by 16.8% in Québec, compared to 13.1% in
• In addition, the household debt ratio, that is, the value of household liabilities as a proportion of disposable income, is significantly lower in Québec (148.3% in 2022) than in Canada (189.1%).

As a result, Québec’s economy is well positioned to begin a sustainable recovery as of the second half of 2024, in synchronization with the gradual decline in interest rates and lower inflation.

>>  Priorities: Health and education

The government is making investments to significantly increase wages in exchange for greater flexibility and significant gains in work organization. It is thereby improving the working conditions of government employees, in particular those in the health and social services and education networks.1

• These investments will result in better services for the population, through improved work organization and recognition of workers’ expertise and The government is therefore positioning itself as an employer of choice, improving its ability to hire and retain staff.

As part  of  the  Québec  Budget  Plan – March 2024,  the  government  is  investing $8.8 billion by 2028-2029. Of this amount, nearly $5 billion benefits health, education and higher education.

In recent years, significant steps have been taken to provide better health and social services to Quebecers. More recently, the Act to make the health and social services system more effective was assented to. It will lead to the creation of Santé Québec and allow for a modernization of the network’s governance in an effort to support service delivery and facilitate access to services.

• In this budget, investments of nearly $3.7 billion will help improve access to care and services and increase hospital fluidity, ensure the maintenance and quality of care and services for seniors, and consolidate social services for youth and vulnerable

The government is committed to the educational success of young people and to supporting student retention. The end of 2023 was marked by disrupted classes for many, and the return to school, after many weeks away for some, poses an additional challenge for students and teachers alike.

• Nearly $819 million by 2028-2029 have been earmarked, in particular to help all students make up the educational shortfall by the end of the school year and support the school staff. These funds will also be used to make learning environments more

The government considers graduation rates in college and university as an essential lever, particularly for overcoming labour shortages and fostering Québec’s socioeconomic development.

As part of the budget, investments of more than $420 million over five years will help promote the success and retention of university students, support training in priority fields and digital transformation, increase the number of student housing units and maintain the building inventory.

In addition to major investments in health care and education, more than $2 billion by 2028-2029 is provided to support Quebecers and communities.

• Nearly $1.3 billion will help facilitate access to housing, support youth and families, and promote the social inclusion of the most
• Investments of more than $755 million are aimed at consolidating the public safety intervention capacity and strengthening legal support and services for vulnerable individuals, showcasing culture and promoting the French language, as well as protecting the environment and facilitating adaptation to climate change.

The government is also continuing its efforts to increase Québec’s economic potential.

• Investments of nearly $1.9 billion by 2028-2029 are planned to support strategic sectors and economic growth, grow the available labour pool and increase productivity in the construction industry, contribute to the prosperity of the regions and foster immigrants’ economic and social

Lastly,  the  government  is  taking  steps  to  generate  $2.9 billion  in  revenue    by 2028-2029 in order to optimize government action.

• It is adjusting certain tax assistance measures for businesses, asking government enterprises for optimization efforts, continuing its tobacco control efforts and ensuring the fairness and integrity of the tax

>> A prudent and responsible financial framework

The financial framework paints a fair and transparent portrait of the state of public finances.2 Despite the deficits anticipated in 2024-2025 and subsequent years, the financial framework remains prudent and responsible.

The government is maintaining its commitment to restore fiscal balance after deposits of dedicated revenues in the Generations Fund. Given the uncertain economic  context,  it  will  table  a  plan  to  restore  fiscal   balance   when   Budget 2025-2026 is released. Fiscal balance within the meaning of the Act will be achieved by 2029-2030 at the latest.3

In the meantime, in addition to taking steps to optimize government action, the government will begin the process of reviewing all its tax and budgetary expenditures in spring 2024.

It will also continue to make representations to the federal government to obtain its fair share of federal transfers, while keeping its commitment to create more wealth and increase Québec’s economic potential by investing $1.9 billion to act on economic priorities.

The government is staying the course on its objective to reduce the net debt burden to 30% of GDP by 2037-2038.4 This will be achieved by restoring fiscal balance, continuing deposits in the Generations Fund and implementing initiatives to accelerate economic growth.

Reducing the debt burden contributes to economic growth by creating a climate of confidence conducive to private investment and higher productivity.

A detailed outline of the planning and budgetary measure can be found here.

The Presentation that Québec Finance Minister Éric Girard gave at the Harvard Club in NY earlier this week can be found here.

Compliments of the Delegate of the Government of Quebec in New York – A member of the EACCNY