The $6 billion increase in Treasury receipts this year will ease the debt burden in 2023 despite a likely recession. And that’s where the Legault government has inflation to thank.
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“I thank the Debt Management Act and the Generations Fund. Since 2006, successive governments have made reducing Québec’s debt burden a priority. Thank you Quebecers,” Treasury Secretary Eric Girard said first.
However, he acknowledged that the significant growth in nominal gross domestic product (GDP), ie in current dollars (without inflation adjustment), is useful for the debt reduction mission. Nominal GDP grew by 10% in 2021 and just as much in 2022.
This significantly reduced the ratio of gross debt to GDP. It rose from 46.8% in 2021 to 41.8% in 2022 and should reach 40.4% in 2023, below the government target of 45%. As of this year, the rate has reached its lowest level since 2009.
The government of Quebec’s net debt as of March 31 was $192 billion.
In the next budget, the government must announce new long-term debt reduction targets.
“We will discuss the targets, but achieving the Canadian average in the medium term certainly remains the essence of what we want to do,” Minister Girard said.
Quebec’s debt ratio is above the national average.
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