Quebec’s budget deficit is now estimated at $4.6 billion for 2021-2022, an improvement of $2.8 billion compared to the deficit forecast in the 2022-2023 budget tabled on March 22.
Posted at 4:36 p.m.
Finance released the financial operations report as of February 28, 2022 on Friday.
“Last March’s budget projected a deficit of $7.4 billion for the whole of 2021-2022,” Finance Minister Eric Girard said in a statement. However, today we are presenting a new estimate of the budget balance, in light of data obtained since the presentation of the budget and for the sake of transparency in the run-up to the publication of the pre-election report in August.
Since the publication of the last budget, nominal GDP growth has increased by 1.8 percentage points and is now at 13.1% in 2021.
Government tax revenues have been boosted by the sharp rise in inflation since the start of 2022, the report said.
“This improvement in the budgetary situation for the year 2021-2022 must be put into perspective, warns the Minister, however, as economic risks accumulate, in particular the rise in interest rates, the volatility of the financial markets, the continuing inflation and bottlenecks as well as the consequences of Russia’s invasion of Ukraine. »
Own-source revenue growth
Own-source revenue grew by 18.9% in one year as of February 28, 2022 due to the good performance of the economy.
“The growth in revenue from corporate taxes is exceptional (51.9% as of February 28),” reads the Finance press release. In absolute value, the increase amounts to 3.9 billion.
Personal income tax is not to be outdone with an increase of 12.6% to 4 billion. Contributions for the health service increased by 1 billion or 17.5%, increases “attributable in particular to the growth in wages and salaries”.
The government garnered 3.5 billion (18.2%) more in one year in QST, due to the increase in household consumption and the vigor of residential construction. Mining royalties and duties collected on carbon credits add $1.3 billion to the coffers in Quebec.
The preliminary results for the full year 2021-2022 will be presented next June in the Monthly report of financial transactions as at March 31, 2022.