The Quebec Budget

- Why Should I Care ?

If you live in Quebec, you would be interested in knowing how your taxes are being used. The province has used innovative strategies in the past to develop its economy, such as creating its own pension fund, public auto insurance, Hydro-Québec utility, affordable daycare, and the unique cégep education system. Quebec was also the first province in Canada to impose its

- This lecture has 2 parts

• Revenues
• Expenditures

- What is the Quebec Budget?

After an important spending freeze in 2013, 2014, and 2015, the Quebec budget has been balanced since 2015, thanks to increases in revenue. This is mostly due to the betterment of the economy and increases in tax revenue. Of course the 2020-21 COVID-19 pandemic has changed the situation drastically. Thanks to a very tight labour market, the province is hoping to be back on track relatively quickly.

• Revenues

NEW DATA 

For 2016-2017, Premier Philippe Couillard’s liberal government has had a budget surplus. On total revenue of 102.9 billion dollars (B$), the government has spent 98.5 B$, including interest charges on the provincial debt. This 4.4 B$ surplus was set aside in two savings accounts: the Generations Fund (2 B$), and the Stabilization reserve (2.4 B$).

Table

Revenue streams	2016-2017 (M$)	Share of total	Budgeted 2017-2018	Annual Variation
Total income tax	44,849	43.6%	45,306	1.0%
Personal income tax	29,231	28.4%	29,115	-0.4%
Health Contribution	5,969	5.8%	6,049	1.3%
Corporate income tax	7,480	7.3%	7,900	5.6%
School Property Tax	2,169	2.1%	2,242	3.4%
Total excise taxes/duties	22,589	22.0%	24,246	7.3%
Consumption taxes (incl. QST)	19,292	18.7%	20,299	5.2%
Duties and Permits	3,297	3.2%	3,947	19.7%
Total other revenues	15,290	14.9%	14,975	-2.1%
Government Enterprises	4,899	4.8%	4,735	-3.3%
Miscellaneous	10,391	10.1%	10,240	-1.5%
Total Federal Transfers	20,179	19.6%	22,669	12.3%
Equalization	10,030	9.7%	11,081	10.5%
Health Transfer	5,946	5.8%	6,211	4.5%
Education and Social Transfer	1,635	1.6%	1,701	4.0%
Other Programs	2,568	2.5%	3,676	43.1%
Total budgetary revenues	102,907	100.0%	107,196	4.2%

Total revenue stood at 102.9 B$, almost half of which is collected in the form of income taxes. Other taxes represent a quarter (22 percent) of the total, and include the QST, and excise taxes on fuel, cigarettes and alcohol.

Other revenues collected by Quebec City include Government Enterprises, such as Hydro-Quebec, Loto-Quebec, the Société des alcools du Québec, Investissement Québec, and the Société de l’assurance automobile du Québec.

Federal Transfers make up one-fifth of the province’s revenue (19.6%), which include Equalization, and the Health and Education transfers.

• Expenditures

Quebec’s expenditures rang up at 98.5 B$, including interest charges on the provincial debt.

Quebec Government Expenditures	2017-2018 (M$)	Share	Budget 2016-2017	Annual Variation
Health and Social Services	40,240	39%	38,737	-3,7%
Education and Culture	22,572	22%	21,646	-4,1%
Economy and Environment	13,833	13%	12,338	-10,8%
Support for Individuals and Families	10,113	10%	9,585	-5,2%
Administration and Justice	8,059	8%	6,712	-16,7%
Debt Charges	9,237	9%	9,527	3,1%
Total	104,054	100%	98,545	-5,3%

More than a third (39 percent) of the money went to Health, which mostly covers the wages of doctors, nurses and civil servants who run the hospitals, clinics and other health care institutions in the province.

A quarter of the sums (22 percent) went to Education, which includes primary, secondary, Cégep, and university institutions.

The rest of the money is spent on the other “missions” of the provincial government (21 percent) such as economic development, environment, transit and transportation infrastructure, support for people (welfare cheques, etc.), and the justice system (police, courthouses, and prisons).

The final accounting line is devoted to interest payments on the public debt (9 percent).