Back to the press releases
Government announcement
March 16, 2018

The new Quebec reduces its debt with the Generations Fund


Remboursement de la dette = moins d'intérêts à payer = 1 milliard de dollars de plus pour les services publics ⤵️À…

Posted by Parti libéral du Québec on Wednesday, 14 March 2018

Nous posons un geste responsable et équilibré. La mission du Fonds des générations est respectée : réduire la dette et pas pour financer des promesses électoralistes non-budgétées. #BudgetQc

Posted by Carlos J. Leitão on Wednesday, 14 March 2018

Québec City, March 14, 2018. – Starting the next financial year, Quebec will start repaying its debt at the rate of $2 million per year, using part of the money gathered in the Generations Fund since its creation in 2006. This was announced today by Quebec Premier Philippe Couillard and Finance Minister Carlos J. Leitão.

Over the next five years (from 2018–2019 to 2022–2023), a sum of $10 billion from the Generations Fund will be used to reimburse loans that are due. The government will thus reduce Quebec’s debt in the financial market, which will decrease the interest accrued on it.

The Act to reduce the debt and establish the Generations Fund provides that the Generations Fund can only be used for one thing: repaying the debt. The Generations Fund will continue to grow by receiving revenue each year dedicated to reducing the debt.

Couillard and Leitão also took this opportunity to confirm that the Quebec Economic Plan will be presented on March 27. This plan will especially focus on the quality of life of Quebecers and will be based on three axes:

  • Giving families more quality time;
  • Improving Quebecers’ standard of living;
  • Continuing to improve services, especially in health, education and better mobility.

Quotes:

Quebec’s debt-reduction strategy, started in 2006, has been bearing fruit. In 2006, only a few months after the creation of the Generations Fund was announced, two rating agencies, Moody’s and DBRS, increased Quebec’s credit rating, specifically mentioning the government’s commitment to reducing its debt. Thanks to these efforts, Quebec is no longer the most indebted Canadian province. We are now taking the next step to repay our debt in financial markets, which will increase our ability to improve our public services and the quality of life of Quebecers. We are making a responsible and balanced move within the scope of our quest for better intergenerational equity in a new Quebec.

– Philippe Couillard, Premier of Quebec 

The progress made over these past few years has been considerable. By balancing our past three budgets and relying on the Generations Fund, we have solidified our public finances and taken control of our debt. We are now tackling its repayment. The gross debt has started to diminish for the first time since the 1950s. Today, we are sending a powerful message to our children and all the generations that will follow us. It is essential that the mission of the Generations Fund, which was implemented to ensure intergenerational equity, is followed. The Fund must promise our children that they will benefit from better public services, and it will not finance non-budgetary promises made for electoral ends. We have put our house back in order; we have established a solid and predictable financial framework and rekindled confidence. These three fundamental elements put Quebec in a position to build its future.

– Carlos J. Leitão, Quebec Minister of Finance

Key facts:

  • Repayment will begin in 2018–2019, the next financial year.
  • During the next five years (2018–2019 to 2022–2023), $10 million from the Generations Fund will be used to reimburse loans that are due.
  • Nearly $1.1 billion dollars more will be allocated to financing public services over five years.
  • In 2015–2016, thanks to the balanced budget, the ratio of the gross debt to the GDP decreased for the first time since 2008–2009. For this financial year, the gross debt even decreased in absolute terms for the first time since the 1950s.
  • The government has set itself debt reduction objectives that it will meet. As soon as next year, the debt-GDP ratio will be less than 50% of the GDP and will drop to 45% by 2022–2023, while the debt from accumulated deficits will not exceed 17% of the GDP. The announcement of the debt’s repayment is in line with these objectives.