Share
Updated on March 28, 2025
The seventh budget tabled by Éric Girard, the Québec Minister of Finance, was drafted under different circumstances compared to last year.
The protectionist measures already adopted by our U.S. “allies” combined with those of China and the new volley of tariff measures expected as of April 2 from our neighbors south of the border led the Quebec government to unveil a budget plan that focuses on innovation and assistance for businesses. At the same time, this budget revealed limited financial leeway as a result of the uncertain economic environment. This budget announces belt-tightening measures with a widespread freeze on spending over five years in order to balance the budget.
Public finances in the red for at least five years
When it comes to public finances, we should bear in mind that the plan to return to a balanced budget was delayed in the 2024 Budget, with a view to being tabled in the current budget. Accordingly, the 2025 Budget forecasts a return to a balanced budget within five years, by 2029–2030. However, achieving this objective may be difficult in light of the economic upheaval, particularly since the baseline scenario hinges on the assumption that 25% U.S. tariffs will not apply over the long term and the budget forecasts reflect revenues that take into account a capital gains inclusion rate of 66.66% as of 2026.
For the 2024–2025 financial year which will come to an end in a few days, the anticipated deficit is now $10.4B which is lower than the previous record of $10.9B anticipated in both the 2024 Budget and last November’s economic update. However, this deficit will increase further in 2025–2026 to a record total of $13.6B, after payment to the Generations Fund, whereas it was forecast at $9.2B in November 2024 for the same period. Ultimately, a surplus of $101M is forecast by 2029–2030 under the baseline scenario.
A focus on innovation and supporting businesses…
This budget is primarily focused on measures aimed at promoting wealth creation in Quebec. This approach is intended as a response to a slower economy resulting from the economic uncertainty that worries business leaders and tariff measures that will hinder the growth of many economic drivers, including our SMEs.
Among the measures announced, a total of $5.4B over five years has been earmarked to support and boost the Quebec economy, increase the ability to innovate and consolidate regional contributions to wealth creation. This includes:
- $4.1B for supporting and revitalizing Quebec’s economy by providing transitional assistance to businesses affected by U.S. tariffs (including a $400M envelope over two years to offer businesses liquidity support), supporting investment projects ($3.5B), fostering market diversification ($195.8M) and making it easier to identify Quebec products ($4.5M);
- $604.1M for increasing Quebec’s capacity to innovate:
- by stimulating innovation and its commercialization through an updated tax assistance system ($271.5M which includes a new simplified and enhanced tax credit for research, innovation and commercialization that will replace eight tax measures currently in effect);
- by boosting innovation in strategic sectors ($194M), modernizing public services for greater efficiency ($96.3M) and helping SMEs with strong potential ($42.3M);
- $759M for encouraging regional contributions to wealth creation by revitalizing regional economies ($217.4M), leveraging our critical and strategic minerals ($106.6M), supporting the forestry industry ($94.7M), continuing to support the tourism industry ($138M) and fostering the development of the bio-food sector ($202.3M).
… while continuing to improve health and education services
In this budget, the government is devoting more than $6.8B over six years to health and education services. A sum of $3.9B will be earmarked for health and social services; $2.2B of this amount will be used for funding new pharmaceutical treatments in hospitals, for deploying new health care and social services facilities and for training more doctors. This is supplemented by a sum of $1B, allocated to the following purposes:
- meeting the growing needs in youth protection;
- providing additional accommodation support to vulnerable individuals who require special support;
- providing assistance to young people leaving youth protection centers and to people experiencing homelessness who benefit from the Rent Supplement Program;
- increasing funding for community organizations;
- consolidating the mixed practice of psychosocial interventions and community policing, and
- entrenching support for Indigenous clienteles by supporting the implementation of cultural safety in the health services network.
The government is setting aside close to $1.1B for the education and development of young people. More than $368M of this envelope will, among other things, go toward supporting academic success, training a greater number of qualified teachers and encouraging retirees to return to the education network. A sum of $279M will also be used to strengthen support for youth and students by funding, in particular, the Student Financial Assistance program and maintaining services offered to support young people in their journey to self-sufficiency.
For more information on the tax measures announced in this budget, please continue reading.
-
Download the document 2025 Quebec Budget version anglaiseQuébec Budget 2025: Belt-Tightening Measures in the Context of a Tariff “War”