QUEBEC CITY, Que.—The province of Quebec will post a balanced budget for 2015 featuring tightly control government spending as the province aims to slice its massive debt over the next decade, says Finance Minister Carlos Leitao.
With a gross debt of $197.1 billion as of March 31, 2014, Quebec was by far the most indebted province in the country.
Leitao’s 2015-16 budget, tabled in the national assembly Thursday, contains no new taxes and ends a string of six consecutive deficits that added $16 billion to the debt.
The ratio of Quebec’s debt to gross domestic product last year was a crippling 54.3 per cent, the highest in the country.
In comparison, Ontario followed at 45 per cent, while Alberta had the best ratio at seven per cent.
In tabling the budget, Leitao was looking as far ahead as 2026 when, he hopes, Quebec’s ratio will have dropped to 45 per cent.
Quebec expects overall revenue of $100.2 billion in 2015-16, with $19.4 billion of that coming from Ottawa.
Leitao also confirmed the deficit for 2014-15, which ends this coming March 31, will be $2.35 billion, as was projected in last June’s budget.
On Jan. 1, 2017, the general corporate income tax rate will be cut by one-tenth of a percentage point a year until January 2020, when the rate will be 11.5 per cent.
The government estimates the measures, once fully implemented, will represent a $120-million decrease in the tax load on businesses every year.
And in a bid to keep older Quebecers from retiring, Leitao said an improved tax credit will help save a 63-year-old worker $902 a year by 2018, while the amount will climb to $1,504 for a worker aged 65.
Highlights of Quebec’s 2015-16 budget:
Taxes: No new ones
Economic growth: Two per cent
Gross debt: $197.1 billion as of March 2014; estimated to be $210.5 billion in March 2016
Health tax: Will be fully eliminated for 4.5 million taxpayers by 2019
Corporate tax: Gradual reduction in general income tax rate to 11.5 per cent in January 2020 from 11.9 per cent, beginning in January 2017
Workforce: Employees 63 and over will receive a new tax credit of up to $602 in 2017 and $902 in 2018; for those 65 and over, the amount in 2018 will be $1,504