Researchers at HEC Montreal are sounding the alarm on Quebec's economy.

They also say it is risky for Quebec to attempt to eliminate social inequality until it gets expenditures under control.

"We are governed like we don't have any budget constraints," said the study's author Robert Gagné, who said Quebec has lofty goals for social programs but does not have the means to pay for them.

"Daycare is a nice program, if we can afford it."

The study looked at public spending along with the tax burden on Quebec citizens and said they are combining to make Quebec one of the poorest provinces in Canada.

The study's authors say that the standard of living in Quebec has been steadily declining since 1981, in part because of a constant increase in public spending and diminishing returns from that spending.

The director of the Productivity and Prosperity Centre at HEC Montreal, Robert Gagné, said the decline in growth is also a problem.

"Since the early '80s we don't have enough growth," said Gagné.

"At the same time we are struggling to fund adequately our existing programs... roads, schools, hospitals... so we don't have money to travel or to repair the roof of the house so we're [doing it anyway] on our credit card."

The analysis also underlines that the standard of living in Quebec is lower than that of most OECD countries, and lower than the Canadian average.

"Since 1981, if we had the same growth as New Brunswick, over that 30-year period our average" income would be $10,000 more per year per person, added Gagné.

Because of a steady increase in taxes Quebecers are also faced with less take-home pay to cover their own expenses, but in a seeming paradox the increase in taxation rates is leaving the province poorer.Quebec's debt has not declined since the beginning of the 2000s, coinciding with a worldwide slowdown in economic activity.

According to the study in 2012 the average Quebecer was spending $26,311 on necessary living expenses, $10,723 servicing public debt and $10,827 on private investment.

This means Quebecers are in the hole to the tune of $3,453 each.

Throw in an aging population and it means "people will have to retire later, of course, and have to work more" according to Gagné.

The study shows Quebecers work the least in all of Canada, but pointed out that working longer hours alone will not be enough.

"When you look at different countries, growth is coming from productivity growth, not from labour hours," said Gagné.

Gagné said the study shows Quebec has to increase productivity and get a better return on investment, while slashing debt.

He says Quebec is very close to becoming the poorest province in the country, ahead of only the Maritime provinces.

Gagné also said Quebec cannot increase taxes on companies in order to boost public revenues without putting the economy in peril.

He said that it is essential that Quebec scale back public services and cut the number of public servants.

The study also recommends that Quebec take steps to implement user fees.

"We will have to re-examine programs, maybe get rid of other programs, because we just can't pay for it."