Quebec revises its deficit for 2021-2022 downward to $4.6 billion

Quebec Finance Minister Eric Girard pauses as he presents the government's budget, Tuesday, March 22, 2022 at the legislature in Quebec City. THE CANADIAN PRESS/Jacques Boissinot

The Quebec government is revising its budget deficit for the year 2021-2022 downward due to a "stronger than expected" economic recovery.

As a result, Quebec's budget deficit is now estimated at $4.6 billion for the year 2021-2022.

The budget tabled on March 22 projected a deficit of $7.4 billion, before use of the stabilization reserve.

The Ministry of Finance said Friday that it is presenting a new estimate of the budget balance "in light of new data obtained since the budget was tabled and in the interest of transparency in the lead-up to the release of the pre-election report in August."

The department attributes this result in large part to "robust growth" in own-source revenues since the beginning of the fiscal year, standing at 18.9 per cent as of Feb. 28, 2022.

According to the ministry, growth in corporate tax revenues is "exceptional" -- 51.9 per cent as of Feb. 28 -- and similar improvements have been seen in other provinces.

"The strong performance of the economy over the past several months has had a greater-than-expected impact on growth in wages and salaries, business profits and household consumption, which has been reflected in the government's own-source revenues over the period," the release said Friday.

Since the release of the 2022-2023 budget, nominal GDP growth has been revised upward by 1.8 percentage points in 2021 to 13.1 per cent.

Finance Minister Eric Girard was keen to point out that the economic outlook remains uncertain.

"This improved fiscal position for 2021-2022 must be kept in perspective as economic risks mount, including rising interest rates, volatile financial markets, persistent inflation and bottlenecks, and the consequences of Russia's invasion of Ukraine," Girard said.

Preliminary results for the full year 2021-2022 will be presented next June in the Rapport mensuel des opérations financières as of March 31, 2022.

-- This report by The Canadian Press was first published in French on May 20, 2022.