QUEBEC --Quebec will post a balanced budget this year and tightly control government spending as the province aims to slice its massive debt over the next decade, says Finance Minister Carlos Leitao.

With a gross debt of $197.1 billion as of March 31, 2014, Quebec was by far the most indebted province in the country.

Leitao's 2015-16 budget, tabled in the national assembly Thursday, contains no new taxes and ends a string of six consecutive deficits that added $16 billion to the debt.

"The return to a balanced budget is not the end," he told the legislature.

"Quite the opposite, in fact, it is a point of departure and gives new momentum to Quebec."

The ratio of Quebec's debt to gross domestic product last year was a crippling 54.3 per cent, the highest in the country.

In comparison, Ontario followed at 45 per cent, while Alberta had the best ratio --seven per cent.

In tabling the budget, Leitao was looking as far ahead as 2026 when, he hopes, Quebec's ratio will have dropped to 45 per cent.

More immediately, Leitao stressed the importance of keeping the lid on government spending if the province wants to achieve its goals.

Quebec also came out with its 2015-16 spending estimates Thursday, making it clear that previously announced cost-cutting measures are only the beginning of a long-term strategy to downsize government.

Various agencies will be merged, the number of government employees will be reduced and those who remain will be offered salary increases that "respect taxpayers' ability to pay."

"Government spending must be contained,', said Treasury Board president Martin Coiteux. "We can no longer spend more than the revenues we receive."

A Quebec budget wouldn't be complete without a plea for more money from the federal government -- and Thursday's was no exception.

Leitao, who before entering politics to run in the 2014 election was ranked as the world's second-best economist by Bloomberg News, called on Ottawa to boost transfers in health, social and equalization payments and to invest more in infrastructure in the province.

"The federal government must further commit to sharing the provinces' financial pressures in regard to social programs and infrastructure, in a context where federal surpluses are on the horizon," he said.

Quebec expects overall revenue of $100.2 billion in 2015-16, with $19.4 billion of that coming from Ottawa.

Leitao also confirmed the deficit for 2014-15, which ends this coming March 31, will be $2.35 billion, as was projected in last June's budget.

He announced that as of Jan. 1, 2017, the general corporate income tax rate will be cut by one-tenth of a percentage point a year until January 2020, when the rate will be 11.5 per cent.

The government estimates the measures, once fully implemented, will represent a $120-million decrease in the tax load on businesses every year.

Education and health

Education and health spending increases will be limited to 1.2 percent. Provincial health expenditures will be raised 1.4 percent, considerably lower than the 4.2 percent seen last year. Education spending will grow 0.2 percent, compared to 1.6 percent one year earlier.

Health spending will amount to $32.8 billion, compared to $32.4 billion one year earlier. Education spending will be $16.92 billion compared to $16.89 billion. The government estimates that the Bill10 healthcare reform will save $55 million. Another $40 million could be saved by encouraging generic drugs.

In a bid to keep older Quebecers from retiring, Leitao said an improved tax credit will help save a 63-year-old worker $902 a year by 2018, while the amount will climb to $1,504 for a worker aged 65.

"Quebec will be confronted with a major challenge in regard to manpower in the coming years and we want to create conditions that will encourage more experienced workers to pursue their career for longer," he said.

Parti Quebecois finance critic Nicolas Marceau accused the Liberals of taking shortcuts that compromise economic growth.

"It's easy, very easy, to table a zero-deficit budget when you don't care about the consequences on economic growth, on employment, on investment, on Quebecers' standard of living and on services to the population," he said.

“They showed respect for the metropolis for all our needs, our demands are 95 percent are fulfilled,” Montreal Mayor Denis Coderre told CTV Montreal.

Montreal tax expert Robert Raich told CTV Montreal that the government was wise to attack debt and expenses.

“There are three major themes, a reduction in corporate taxes and other goodies for corporations; they want to encourage older people to work harder and that addresses Quebec’s demographic issues of an aging population. And they want to encourage taxpayers to make more money. They say they won’t penalize you for booting you into a higher tax bracket,” said Raich, who notes, however that many benefits are deferred to 2016 and 2017.

The danger is that some of the preconditions of the budget to work might fail, he said.

“Budgets are based on assumptions. There are three major assumptions I’m worried about. The price of oil. If it goes up it’s a problem. The high U.S. dollar is good for Quebec. If it gets weaker, that could be bad. And if interest rates rise, that could cost Quebecers,” said Raich who said the government is assuming “the perfect good storm.”

Various groups will be merged. The Workers Health and Safety Board (CSST) will be consolidated with the Labour Standards Commission (CNT) and the Pay Equity Commission (CES). The Labour Relations Commission (CRT) will be merged with the Employment Injuries Commission (CLP). The Régie des rentes will be fused with the Administrative Commission of the Pension and Insurance Plans. (CARRA). The Regie du cinema will become part of the Culture Ministry (MCC).

Highlights of Quebec's 2015-16 budget, which Finance Minister Carlos Leitao tabled Thursday:

Deficit: Balanced budget on own-source revenue of $80.7 billion

2014-15 deficit: $2.35 billion, as projected last year

Federal transfers: $19.4 billion

Taxes: No new ones

Economic growth: Two per cent

Gross debt: $197.1 billion as of March 2014; estimated to be $210.5 billion in March 2016

Health tax: Will be eliminated gradually as of 2017 for 2.1 million Quebecers; it will be fully eliminated for 4.5 million taxpayers by 2019

Corporate tax: Gradual reduction in general income tax rate to 11.5 per cent in January 2020 from 11.9 per cent, beginning in January 2017

Workforce: Employees 63 and over will receive a new tax credit of up to $602 in 2017 and $902 in 2018; for those 65 and over, the amount in 2018 will be $1,504

-With files from The Canadian Press