Quebec deficit falls to $7.2 billion
Posted June 12, 2026 7:40 am.
Quebec’s budget deficit came in at $7.2 billion for the 2025-26 fiscal year, nearly half the amount projected when the government tabled its budget last year.
The Finance Department released a report Thursday afternoon outlining the province’s preliminary financial results for the fiscal year that ended March 31, showing an improved fiscal picture.
The $7.2-billion deficit represents a 47 per cent decrease from the $13.6-billion deficit forecast in the March 2025 budget. That figure had later been revised downward to $9.9 billion in the budget tabled earlier this year.
The deficit, calculated under Quebec’s Balanced Budget Act, includes transfers to the Generations Fund.
Finance Minister Eric Girard said the improvement was largely due to higher-than-expected revenues and because the government did not use its $2-billion contingency reserve.
Asked whether the government had been overly cautious when preparing its March budget projections, Girard pointed to uncertainty stemming from the trade dispute with the United States and the conflict in the Middle East.
“We continue to exercise a great deal of prudence, sound prudence, with a $2-billion contingency reserve,” Girard told reporters at the National Assembly, noting that the full amount remains available for the current fiscal year.
He added that the 2025-26 budget was prepared at a time when U.S. President Donald Trump was returning to the White House and threatening tariffs on Canadian imports entering the United States.
“We prepared a budget in an extremely difficult environment. As a result, we were necessarily cautious regarding economic growth and revenue growth,” Girard said.
The minister attributed the improved financial results to what he described as a strong, resilient domestic economy despite geopolitical uncertainty.
According to the Finance Department’s report, revenues were $584 million higher than forecast in the 2026-27 budget.
The report says the increase was largely driven by growth in wages and salaries, household consumption and corporate net operating surpluses, reflecting the resilience shown by individuals and businesses since the start of the trade dispute with the United States.
Meanwhile, spending was revised downward by $2.2 billion compared with projections in the budget tabled in March.
The accounting deficit, which excludes the Generations Fund, also improved, reaching $4.9 billion for 2025-26, or 0.8 per cent of gross domestic product. It had been projected at $7.7 billion in the latest budget.
“Based on the information currently available, it would be the smallest deficit in Canada for 2025-26,” Girard said.
Despite the improved results, Girard said the government is still targeting a return to a balanced budget in 2029-30, citing ongoing uncertainty surrounding the review of the Canada-United States-Mexico Agreement.
–This report by La Presse Canadienne was translated by CityNews
