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Quebec budget

Quebec: Budget 2025

The Unique Challenge of Balancing a Budget During a Trade War

March 25, 2025
Jimmy Jean, Vice-President, Chief Economist and Strategist
Sonny Scarfone, Principal Economist

Highlights

  • The trade dispute with the United States will contribute to a deeper deficit. It’s now expected to reach $13.6B (2.2% of GDP) in 2025–2026 after being revised slightly downward to $10.4B for 2024–2025.
  • As required under the Balanced Budget Act, the Budget Plan for 2025–2026 (fiscal year 2026 or FY2026) projects that a balanced budget will be achieved by 2029–2030 (FY2030). To meet this requirement, a further $2.5B in gaps will have to be bridged by then (graph 1).
  • The government’s baseline assumption is that US tariffs will average 10% and remain in place for the next two years, and that Canada will impose equivalent retaliatory measures.
  • Revenue forecasts have been revised downward and are fairly conservative over the forecast horizon (with growth averaging 3.5% over the next five years). Certain tax changes will allow the government to recover a total of $3B over five years.
  • To offset the private sector’s tariff-induced slowdown over the two-year period, the government is adding $11B to the Quebec Infrastructure Plan (QIP) for 2025–2035, with most of the additional investments occurring over the next three years.
  • Regardless of tariffs, the key to balancing the budget will be tight control over spending. The government expects average annual expenditure growth of 1.7% between now and FY2030.
  • The government intends to borrow $29.7B in FY2026 (following the $9.3B in pre-financing already carried out), then $37.5B in FY2027. In the following three years, it will borrow a total of $89.5B.

PDF Publication

See the full publication in PDF.

Quebec: Budget 2025 (PDF, 441 KB)
NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.