Legault ‘takes full responsibility’ for government’s choices that led to debt rating downgrade

Premier François Legault “takes full responsibility” for his government’s economic choices, even though some of them have led Standard & Poor’s (S&P) to downgrade Quebec’s credit rating for the first time in 30 years.

In a lengthy message posted on social media on Friday morning, Legault acknowledged that his government could have made other financial decisions that might have avoided a downgrade, and that S&P’s decision was “bad news”.

However, he maintained that all the choices he has made since coming to power have been guided by the convictions of the Coalition Avenir Québec.

“If the government is in deficit and if a rating agency has downgraded us, it’s because we made decisions based on our convictions,” he wrote, adding that he “fully assumes” his choices.

“We will gradually erase the deficit with a strong economy and a more efficient state. It’s a lot of work, but that’s what we’re here for and we’re going to do it,” he promised.

Justified spending

On Wednesday, S&P raised its rating for Quebec from AA- to A+ with a stable outlook. An A+ rating means that S&P considers that the government has a strong capacity to meet its financial commitments to its creditors, but with slightly more risk than with an AA- rating.

The agency attributed its decision to a series of factors, including a slowdown in population growth, an increase in government employee salaries and a fall in revenues.

On Friday, Legault hit back at S&P, arguing that all his government’s questioned spending was justified.

Among other things, he hammered home the point that increasing government employee salaries was essential to valuing public sector workers such as teachers and nurses. “S&P thinks the government has been too generous. Not me,” he said.

The Premier also pointed out that Quebec must make massive investments in infrastructure, which will amount to $19 billion a year over the next three years.

“S&P thinks that’s too much. On the contrary, we think that the biggest deficit we have in Quebec is the investment deficit in our hospitals, schools, transport, waterworks and so on,” he said.

Legault also admitted that the government had deprived itself of certain revenues, notably by reducing school taxes, increasing family allowances and limiting the increase in electricity rates.

But once again, he confirmed that he was at peace with his choices. “It is my absolute conviction that we must not increase the tax burden on Quebecers and that, on the contrary, we must return as much as possible to your wallet,” he defended himself, addressing the public directly.

“There is no question of me abandoning these three convictions.”

Wealth creation

Even though the latest budget presented by Finance Minister Eric Girard forecasts a record deficit of nearly $14 billion for 2025-2026, and the opposition parties accuse him of overspending, François Legault believes that Quebec remains in a good financial position.

According to him, “the opposition and the media always point to the same projects that are in trouble, like Northvolt, but (his government) has helped hundreds of companies that have been successful.”

“When we look at the whole picture, our economic performance has been very good, far better than that of the Liberal and PQ governments,” he said.

He pointed out that the government could still do more to make the state more efficient.

“There are too many administrative employees in the government and the networks. It’s not that the employees don’t work hard, but there’s far too much paperwork, reporting, accountability, regulations. There are too many organisations, too many administrative departments that could be merged. We need to clean things up, and that’s one of my priorities,” he confirmed.

The last time Quebec suffered a downgrade was in 1995. A lower rating can lead to higher interest rates on government debt.

In an interview broadcast on RDI earlier this week, Minister Girard said he was not concerned that S&P’s decision would lead to an increase in the government’s borrowing costs.

“Quebec is very well perceived on the financial markets,” he said, but that did not stop Liberal finance critic Frédéric Beauchemin from accusing the government of “throwing away several million dollars”.

–This report by La Presse Canadienne was translated by CityNews