Quebec Finance Minister Nicolas Marceau today affirmed his earlier forecast that the province will post a C$1.5 billion ($1.5 billion) deficit in the fiscal year that ends March 31 and balance its books in fiscal 2014.
Economic growth in Canada’s second most populous province will be 1.3 percent this year, down from a November forecast of 1.5 percent, Marceau told reporters at a televised press conference in Quebec City today. Marceau also cut his forecast for 2014 to 1.8 percent from 2 percent.
The slower growth will cut revenue by C$250 million in the 2012-13 fiscal year and by C$565 million in 2013-14, Marceau said. “The fourth quarter was not as good as we expected last year, particularly the month of December,” he said.
Quebec will make up the C$250 million shortfall this fiscal year by using C$150 million from an existing contingency reserve, by paying C$95 million less in debt servicing costs and by receiving an additional C$5 million in transfer payments from the federal government, Finance Ministry documents show.
For the fiscal year that begins April 1, Quebec expects to receive C$280 million in additional federal transfers. Quebec also expects to save C$85 million in debt-servicing costs and use half of a planned C$400 million reserve to make up the C$565 million shortfall and balance the books.
Quebec’s net debt will be about C$176.6 billion as of March 31, and climb to C$180.7 billion by March 2014, equal to 48.8% of gross domestic product, government documents show.
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