Quebec Affirms Balanced Budget Plan as 2014-15 Shortfall Narrows

Quebec reaffirmed a plan to balance the budget this fiscal year as it cut the deficit for 2014-15 by more than half thanks to smaller-than-expected spending.

Last year’s shortfall was C$1.14 billion ($860 million), compared with an earlier estimate of C$2.35 billion, according to a fiscal update released Thursday by Finance Minister Carlos Leitao. Declines in program spending and lower-than-planned outflows at various government funds accounted for most of the improvement, the documents show.

“We are spending less than what we are earning, which is a good thing. This is a trend that we must continue.,” Leitao said at a press conference in Quebec City. “Our economic plan, which relies in particular on disciplined management of public finances, will give new impetus to the Quebec economy.”

Growth in calendar 2015 will be 1.5 percent, unchanged from 2014 and short of the 2 percent forecast in the March budget. Leitao had told Bloomberg News in September he would probably lower the growth target due to persistent weakness in commodities prices.

Borrowing in fiscal 2016-17 will be about C$18.2 billion, less than the C$19.9 billion forecast in the March budget. Quebec expects to borrow about $16 billion in 2017-18, the documents released Thursday show.

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