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Quebec “Debt Clock”

The Quebec debt clock

Debt per taxpayer

Make your voice heard! Send a message to Quebec’s Minister of Finance

Please copy & paste this message in your email and send it to: ministre@finances.gouv.qc.ca

Dear Minister of Finance,

I am writing to let you know about my deep concern regarding the state of Quebec’s public finances. As you know, the public sector debt has now reached over 333 billion dollars. This is the equivalent of $148,857 of debt per family of four, or $48,356 per taxpayer.

The Quebec government has to stop continually increasing the debt. Since the tax burden is already very high, the solution must involve a reduction in government expenditures so that we can eliminate the deficit and then start paying down the debt.

Thank you in advance for your time and attention.

Sincerely,
YOUR NAME

 

Watch our short video “The Story of Quebec’s Debt”

We released this video in 2011. Updated data are available on this page.

Quebec’s public sector debt

Our Quebec “Debt Clock” shows the growth of the public sector debt in real time. Public sector debt includes the government’s gross debt as well as the debt of Hydro-Québec, of the municipalities, and of the universities other than the Université du Québec and its constituent universities.

Based on data provided by the Quebec Department of Finance in its November 21 2024 budget update (which does not take into account Quebec’s share of the federal debt), we estimate that the debt will increase by $7.3 billion by March 31 2025, the equivalent of $56.1 million per day, $38,971 per minute, or $650 per second.

Questions & Answers about Quebec's Debt
1. Why use public sector debt?

When analyzing a government’s indebtedness, it is necessary to go beyond what it manages directly and include the health and education networks, municipalities and other entities under the government’s ultimate responsibility, since the government guarantees their debt. Public sector debt is therefore the most exhaustive measure of Quebec’s debt, the one that provides a picture of what the government of Quebec borrows either directly or indirectly.

2. Why not take government assets into account?

The only “liquid” assets of the government, those that could be sold quickly to pay off debt, are net financial assets. These assets came to $16 billion as of March 31, 2022. It is hard to assess the market value of government-owned fixed assets and infrastructure (roads, bridges, schools, national parks, etc.) since there are no relevant markets. Moreover, it is highly unlikely that the government would sell schools or bridges at some point to pay off the debt.

This is why neither the government nor the auditor general takes these assets into account in attempting to paint a realistic picture of the debt that Quebecers will eventually have to repay. These assets are certainly part of Quebecers’ financial heritage, but they do not reduce the overall bill – or the growing interest – that Quebecers will have to pay. The Quebec government could sell crown corporations such as Hydro-Québec (as proposed already by Claude Garcia in a Research Paper published by the MEI) to restore its finances. However, the same people that insist on including government assets in its debt generally reject that option.

3. How much does debt service cost the government every year?

In 2021-2022, debt servicing cost the government and government agencies $8.4 billion, or $983 per Quebecer.

4. Should we worry about the government’s debt?

A great risk is hidden in another form of government indebtedness: its commitments to pay benefits under a vast array of social programs. Examples include payments under the Quebec Pension Plan, motor vehicle insurance (SAAQ), parental insurance (RQAP) or even subsidized spaces in childcare centres. Although social programs do not represent debt as such, since the government can always modify their nature, maintaining them is likely to require Quebec to raise employees’ and employers’ contributions or to reduce benefits.

Also, certain cyclical and structural factors could, in the coming years, quickly worsen the province’s debt problem. Among other factors, there is the aging of the population (more pronounced in Quebec than elsewhere in Canada), which will put added pressure on our health care system, as well as the likelihood of higher interest rates in the future, which will raise the cost of debt service.

5. How is the growth of the public sector debt estimated for the coming year?

The Quebec Department of Finance does not provide an estimate of the growth of the public sector debt for the coming year. It does, however, provide an estimate of the increase in the government’s gross debt in its budget each year, which is the largest component of the public sector debt (the gross debt accounts for 73% of the public sector debt).

Here is the method used by the MEI to estimate the increase in the public sector debt as of March 31, 2022:

  • For the “government’s gross debt” component, the MEI simply takes the Quebec Department of Finance’s predictions;
  • For “Hydro-Québec’s debt,” “municipalities’ debt” and “universities’ debt,” the estimates come from their average annual growth rates over the past three years.

Components of the public sector debt (millions of dollars)

March 31, 2022 March 31, 2023 Variation
-Government’s gross debt 215,273 228,319 + 6.1%
-Hydro-Québec’s debt 46,442 47,304 + 1.9%
-Municipalities’ debt 30,859 31,765 + 2.9%
-Universities’ debt (other than the Université du
Québec and its constituent universities)
1,452 1,493 + 2.8%
Total (Public sector debt): 294,026 308,881 + 5.1%

Source: MEI’s calculations, Quebec Department of Finance, Budget Plan – Budget 2022-2023, March 2022, p. J.17.

6. To whom is the Quebec government’s debt owed?

The Quebec government’s debt is owed to holders of the bonds it has issued, most of whom are either Quebec citizens or Quebec institutions (financial institutions, retirement plans, mutual funds, etc.). For example, the advertising campaigns of Épargne Placements Québec encourage individual investors to buy Quebec government bonds.

A portion of the government’s debt is held outside of the province of Quebec. However, there are no real data on holders of Quebec debt or on their countries of residence.

The Quebec government’s debt is also made up in part of a retirement plan liability, which is to say what the government has promised in retirement benefits to its civil servants without having accumulated sufficient funds to fulfil those promises. This government debt is not negotiated on the bond markets. It is instead a debt calculated by actuaries, but it is very real nonetheless.

7. What is the Quebec government’s credit rating?

The Quebec government’s credit rating basically has an effect on the interest rate that it pays on its debt. Various rating agencies assign a credit rating to the Quebec government. These ratings are indicated in the Quebec budget each year. Currently, the two main rating agencies assign Quebec ratings of Aa2 (Moody’s) and of AA- (Standard and Poor’s), both higher than Ontario’s.

8. What effect would an increase in the interest rate applicable to the debt have on the Quebec government’s finances?

In fact, there is not one single interest rate applicable to the debt, but rather several rates depending on when the bonds mature and the moment when those bonds were sold to the public.

In addition to new loans due to an increase in the debt, each time a part of the government’s debt comes due, the government must borrow again to refinance the debt that it either does not intend to pay down or lacks the means to pay down. An increase in the cost of borrowing would not be felt immediately since it would be applied only to the current financing program. In time, of course, a larger and larger proportion of the Quebec debt would be at a higher rate of interest.

According to the March 22, 2022 budget, “The recent interest rate hike brings the yield of Treasury bills to 0.6%, while the yield on 10-year Québec government securities is 2.4% after reaching a low of 1.2% in July 2020.”

9. Is Quebec’s debt still the highest among all the provinces?

The province of Newfoundland and Labrador is the only province deeper in debt than Quebec, whether in terms of gross debt as a proportion of GDP, cumulative deficits as a proportion of GDP, or net debt as a proportion of GDP.

Interviews and reports about Quebec's Debt

Interview (in French) with Renaud Brossard, Senior Director, Communications at the MEI, about higher interest rates that would lead to a rapid increase in debt service payments for the Quebec government (March 16, 2023, QUB Radio).
www.iedm.org/iedm-il-faudrait-retourner-a-lequilibre-budgetaire-parce-que-ca-risque-de-nous-couter-cher-renaud-brossard

Interview with Youri Chassin, economist and director of research at the MEI, regarding Quebecers’ tax burden (April 15, 2015, CTV News).
www.iedm.org/53226-mei-quebecers-tax-burden-youri-chassin

Debate (in French) with Youri Chassin, Economist and Research Director at the MEI, about the tax burden and disposable income of Quebecers (April 14, 2015, ARGENT business news network).
www.iedm.org/53232-iedm-fardeau-fiscal-des-contribuables-youri-chassin

Debate (in French) with Youri Chassin, Economist and Research Director at the MEI, about the confusion surrounding the figures discussed in the public debate in the context of current negotiations for the renewal of public sector collective agreements (March 12, 2015, ARGENT business news network).
www.iedm.org/52707-iedm-point-sur-les-echelons-salariaux-debat-youri-chassin

Interview (in French) with Youri Chassin, Economist and Research Director at the MEI, about the confusion surrounding the figures discussed in the public debate in the context of current negotiations for the renewal of public sector collective agreements (March 12, 2015, LCN news network).
www.iedm.org/52577-iedm-point-sur-la-hausse-des-echelons-salariaux-youri-chassin

Discussion (in French) with Youri Chassin, Economist at the MEI, broadcast during Calcul électoral (April 3, 2014, RDI).
www.iedm.org/48478-iedm-la-dette-vous-preoccupe-youri-chassin

Debate (in French) with Youri Chassin, Economist at the MEI, broadcast during À la une (September 26, 2013, ARGENT business news network).
www.iedm.org/46000-iedm-le-deficit-zero

Interview (in French) with Michel Kelly-Gagnon, President and CEO of the MEI, broadcast during Argent maintenant (March 26, 2013, ARGENT business news network).
www.iedm.org/43663-iedm-gauche-droite-des-termes-trompeurs-michel-kelly-gagnon

Interview with Lenka Martinek, Associate Researcher at the MEI, broadcast during CTV News Montreal (March 6, 2013, CTV).
www.iedm.org/43137-mei-interest-rates-lenka-martinek

Interview with Michel Kelly-Gagnon, President and CEO of the MEI, broadcast during The Source (August 21, 2012, Sun TV).
www.iedm.org/40343-mei-equalization-and-quebecs-debt-michel-kelly-gagnon

Report (in French) that mentions the Montreal Economic Institute debt clock broadcast during Les Coulisses du pouvoir (August 12, 2012, SRC & RDI).
www.iedm.org/40052-iedm-compteur-de-la-dette-de-liedm-aux-coulisses-du-pouvoir

Interview (in French) with Youri Chassin, Economist at the MEI, broadcast during Dumont Le midi (May 4, 2012, V Télé).
www.iedm.org/40041-iedm-redevances-minieres-youri-chassin

Report with Jasmin Guénette, Vice-President of the MEI, broadcast during CTV News Montreal (March 21, 2012, CTV).
www.iedm.org/40501-mei-debt-clock-jasmin-guenette

Interview with Vincent Geloso, Economist at the MEI, broadcast during CTV News Montreal (March 21, 2011, CTV).
www.iedm.org/40393-mei-vincent-geloso-quebecs-debt-clock

Mention (in French) of the MEI’s debt clock by host Jean-Luc Mongrain broadcast on the LCN netywork (March 17, 2011, LCN).
www.iedm.org/40055-iedm-jean-luc-mongrain-compteur-de-la-dette-quebecoise

Comment (in French) by Jasmin Guénette, Vice President of the MEI, broadcast during RDI en direct (March 14, 2011, RDI).
www.iedm.org/40056-iedm-jasmin-guenette-endettement

Report (in French) with Claude Garcia, former president of Standard Life’s operations and Associate Researcher at the MEI, broadcast on the TVA network (January 31, 2011, TVA).
www.iedm.org/40040-iedm-claude-garcia-gestion-hydro-quebec

Interview (in French) with Jasmin Guénette, Vice President of the MEI, broadcast during RDI Économie (August 4, 2010, RDI).
www.iedm.org/40458-gerald-fillion-budget-2010-2011

Selection of publications on the issue of Quebec's public finances

We recommend a special selection of publications that closely examine the issue of Quebec’s public finances. These publications explore ideas for improving the organization and the management of the resources within the Quebec government apparatus in order to modernize it and reform its financing methods.

Budgetary Balance: Quebec Must Stay the Course
Gabriel Giguère & Renaud Brossard – March 7, 2024
Viewpoint showing that the government should set up an expenditure review committee to reduce the rate of spending increases in order to improve its financial health

Will Interest Rates Make Debt Service Payments Explode?
Valentin Petkantchin & Renaud Brossard – March 16, 2023
Viewpoint proposing a more rapid return to a balanced budget so as to keep higher interest rates from costing the provincial government, and ultimately Quebec taxpayers, too much money

Quebec Budget: Unsustainable Spending Growth
Miguel Ouellette – March 23, 2022
Economic Note showing the substantial amounts that could have gone toward reducing taxes and decreasing provincial debt if portfolio spending had grown more slowly since 2000

Budget Surpluses: Quebec Must Give Taxpayers Back Their Money
Daniel Dufort – March 9, 2020
Viewpoint explaining that the Quebec government should take advantage of this period of robust economic growth to reduce the personal income tax rate

Pourquoi la dette du Québec continue-t-elle d’augmenter?
Mathieu Bédard – April 17, 2018
Op-ed published on the MEI’s Journal de Montréal blog

Viewpoint – The 2017 Budget: Quebec Must Keep Its Promise to Reduce Taxes
Mathieu Bédard, Germain Belzile – March 27, 2017
Viewpoint comparing the numerous taxes and contributions that have gone up in Quebec in recent years with the short list of reductions

Dette du Québec – Le Québec, province la plus endettée du Canada
Michel Kelly-Gagnon – October 18, 2016
Opinion piece (in French) responding to an op-ed by Jean-Martin Aussant published in La Presse+

De dangereuses illusions à propos de la dette
Michel Kelly-Gagnon – June 6, 2015
Opinion piece (in French) responding to a column by Francis Vailles published in La Presse

Viewpoint – The Tax Burden and Disposable Income of Quebecers
Youri Chassin, Alexandre Moreau – April 14, 2015
Viewpoint exploring the relationship between the tax burden, dependence on government transfers, and individual disposable income by comparing Canadian provinces

Viewpoint – Public Sector Pay Grades
Youri Chassin, Alexandre Moreau – March 12, 2015
Viewpoint aiming to clear up the confusion surrounding the figures discussed in the public debate in the context of current negotiations for the renewal of public sector collective agreements

A Few Points About Quebec’s Debt
Michel Kelly-Gagnon – January 9, 2015
Opinion piece on the effects of high debt levels in Quebec published in The Huffington Post

Quelques réponses sur la dette
Michel Kelly-Gagnon – December 17, 2014
Opinion piece (in French) responding to a column by historian and sociologist Gérard Bouchard published in La Presse

Un chroniqueur en terrain glissant
Michel Kelly-Gagnon – August 6, 2014
Opinion piece (in French) responding to a column published on the L’actualite website that tries to discredit the MEI’s Quebec “Debt Clock”

Viewpoint: The $15-Billion Quebec Surplus That Might Have Been
Youri Chassin – June 1, 2014
Viewpoint explaining how the Quebec government could have recorded a $15-billion surplus by controlling its spending

Viewpoint – Quebec government debt in 2014
Youri Chassin – February 20, 2014
Overview of the size of the Quebec government’s debt on 2014-2015 Budget Day

Who Spends More: Left or Right?
Michel Kelly-Gagnon, Vincent Geloso – March 26, 2013
Economic Note showing the absence of correlation between the governing party’s ideology and the evolution of public spending as a share of GDP

Viewpoint – How would higher interest rates affect Quebec’s debt service costs?
Lenka Martinek, Youri Chassin – March 6, 2013
Publication estimating at 1.3 billion dollars the additional debt service costs incurred by the Quebec government in the case of a 2% increase in interest rates

Viewpoint – The debt of the Quebec government
Youri Chassin – November 20, 2012
Overview of the size of the Quebec government’s debt

Equalization: Towards a Formula that Promotes Further Resource Development
Youri Chassin – May 29, 2012
Economic Note on the equalization formula and its impact on the development of natural resources

Viewpoint – The debt of the Quebec government
Youri Chassin – March 20, 2012
Overview of the size of the Quebec government’s debt

Can We Pay Down the Deficit by Further Taxing the “Rich”?
Michel Kelly-Gagnon – December 6, 2011
Economic Note on the taxation of high-income earners and government deficits

Canada Post: Opening Up to Competition
Vincent Geloso, Youri Chassin – April 26, 2011
Economic Note on the liberalization of the Canadian postal sector

Viewpoint on the debt of the Quebec government
Youri Chassin – March 17, 2011
Overview of the size of the Quebec government’s debt and of its dangers

Viewpoint on the debt of the Quebec government
David Descôteaux – March 31, 2010
Overview of the size of the Quebec government’s debt and of its dangers

Viewpoint on measures for raising productivity in the public service
Germain Belzile – March 9, 2010
Suggestions to make the public service more efficient

Are public sector pension plans too generous?
Pierre Girardin, Michel Kelly-Gagnon – March 2, 2010
Economic Note measuring the value of public sector pension plans

Is government control of the liquor trade still justified?
Valentin Petkantchin – October 5, 2005
Research Paper on the justifications for preserving a government monopoly on liquor sales in Quebec and the economic consequences of this policy

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