2025 Economic Update: Key Measures to Remember

Finances

A $12.4 B Deficit

The budget balance shows a deficit of $12.4 B, representing 1.9% of GDP, after transfers of revenues dedicated to the Generations Fund.

$8.3 B over Five Years to Protect the Purchasing Power of Quebecers in the Current Economic Context

The financial impact of these new initiatives totals $65 M in 2025-2026, $218 M in 2026-2027, and $195 M in 2027-2028.

Return to Balanced Budget Maintained for 2029-2030

The budget deficit is revised downward to $2.9 B in 2024-2025 and $1.2 B in 2025-2026, after transfers of revenues dedicated to the Generations Fund.

Optimizing Expenditure Growth

A reduction in the weight of spending in the economy is planned, with portfolio expenditure growth of 3.4% for 2025-2026, compared to 6.9% in 2024-2025.

Annual expenditure growth will average 2% from 2025-2026 to 2029-2030, in order to maintain a pace compatible with the average annual growth of revenues and the plan to return to a balanced budget.

Increasing Government Efficiency

The government is tabling Bill 7 to reduce bureaucracy and transform administrative practices, addressing the optimization of spending, the reduction of the size of the state, the simplification of administrative processes, the elimination of oversight and accountability mechanisms deemed non-essential, and the improvement of public services.

The government continues the disciplined execution of its spending budget. It maintains and continues the hiring freeze, limitations on overtime, travel expenses, and professional services contracts, adherence to budget envelopes allocated to ministries and agencies, the review and elimination of programs, the capping of independent workforce costs in health and social services, the consolidation of purchasing groups and centralization of human resources management in information technology and technological assets, and the optimization of space and leases in government administration.

Economy

$5.9 B to Ease the Financial Burden on Quebecers

Reducing Social Contributions for Workers and Employers

A decrease of 0.20% in the contribution rate to the Quebec Pension Plan (QPP), shared equally between employers and employees, will be applied as of January 1, 2026.

An additional 5% reduction in contribution rates to the Quebec Parental Insurance Plan, shared between employers and employees, is announced for January 1, 2026, to achieve a total reduction of 13%.

Indexing the Tax System at 2.05%

The government is indexing the parameters of the personal income tax system and social assistance benefits at a rate of 2.05% for 2026, in order to protect the purchasing power of Quebecers.

$2.5 B to Strengthen Quebec’s Economic Resilience

Stimulating Business Investment

$130.1 M is allocated over five years to further support investment by manufacturing businesses.

Creating Research Chairs in Areas of Strategic Importance for Quebec

The Government of Quebec is investing $10 M for the swift creation of 10 research chairs in areas of strategic importance for Quebec, in order to attract international talent working in priority sectors for Quebec’s development.

Maintaining the Contingency Reserve

The contingency reserve is maintained at the same amount, allowing the government to preserve its capacity to respond to a further deterioration of the economic situation.

Regional Economic Development

$400.6 M over 5 Years for Regional Economic Development

$290.4 M in support is provided for the agriculture, forestry, and fisheries sectors, broken down as follows:

• $254.7 M to act immediately to support sectors essential to regional vitality, with a temporary payroll tax holiday;
• $30 M to support the competitiveness of the agricultural sector;
• $4 M to extend the deferred tax refund mechanism to support agricultural cooperatives;
• $1.7 M to extend the income-spreading mechanism for forest producers.

$65 M in support is provided to extend the tax credit for the Gaspe Peninsula and certain maritime regions of Quebec.

$45.2 M in support is provided to renew funding for the Acces PME Network.

Health and Social Services

$58.8 M over 5 Years to Ensure the Well-Being of the Most Vulnerable

Support for Home Adaptation and Renovation Programs

$20 M over two years will be allocated to the Home Adaptation Program, which promotes the ability of persons with disabilities to remain at home.

An additional $29.5 M is planned over four years for the RenoRegion program, which provides assistance to low- and moderate-income homeowner-occupants in rural areas to help them address major deficiencies in their homes.

Addressing Homelessness, Psychosocial Resources, and Social Benefits

$5 M in 2025-2026 is planned to strengthen emergency assistance for homelessness as the winter period approaches.

$3.5 M is announced over five years to improve mixed intervention practices by increasing the number of psychosocial resources that can work in collaboration with police during crisis situations.

$0.8 M over four years is planned to improve the special benefit for infant formula under social assistance, to ensure that lower-income families can continue to benefit from infant formula at a reduced price at pharmacies.

The provincial government will continue its representations to the federal government to obtain additional health transfers, specifically for the Canada Health Transfer (CHT) and the Canada Social Transfer (CST).

Education

$91 M Reduction in Revenue from the School Property Tax

The additional government contribution aims to limit the average increase in school tax bills to 3% for 2025-2026.

Environment

$1.8 B Accumulated in the Electrification and Climate Change Fund (FECC) Transferred to the Generations Fund

In its commitment to increasing government efficiency and optimizing expenditures, the government is moving to release surplus financial resources in the FECC to help fund other funds.

Press Review

Press Review

Quebec’s Finances in 10 Key Numbers – Le Soleil

Contribution Reductions and a Lower Carbon Price – La Presse

The $1.8 Billion Surplus from the Green Fund Absorbed by the Generations Fund – La Presse

What Will Be the Impact of the Economic Update on Your Wallet? – Le Devoir

Economic Statement: QPP and QPIP Contributions Revised Downward – Radio-Canada

Economic Update: New Aid for Businesses Affected by Trump – Journal de Quebec