Economic update: Quebec still unable to control spending growth, says the MEI

• Projected expenditures up $5.4 billion compared to last year.

Montreal, November 25, 2025 – The growth of spending between the budget and the economic update demonstrates a lack of control in the management of public finances in Quebec, says an MEI researcher responding to the economic update presented earlier today by Quebec Finance Minister Eric Girard.

“What we are seeing is not so much the government announcing new programs left and right, but rather its inability to contain spending growth,” says Gabriel Giguère, senior policy analyst at the MEI. “Basically, Quebecers are not really getting anything more from Quebec, but the bill keeps increasing rapidly.”

For the 2025-2026 fiscal year, the government expects to spend $166.7 billion. Last year, Quebec spent $161.3 billion. This therefore represents an increase of $5.4 billion.

Revenues, for their part, are up $2.6 billion compared to last year. The result is a projected deficit of $12.4 billion, some $4.8 billion higher than last year.

Interest payments on the debt are also rising, with the government now expecting to spend $10.2 billion on interest this year. This is a billion dollars more than the Quebec Department of Family Affairs budget.

“It’s all well and good for Minister Girard to try to reassure us by promising a return to a balanced budget in 2029-2030, but we have yet to see a credible plan from him for getting there,” points out Mr. Giguère. He must specify where and how he will find the $2.5 billion of projected savings by then, and present Quebecers with a solid plan to make it happen.”

The government is projecting a balanced budget in 2029-2030, with a balance of $0. It has, however, identified a gap of $2.5 billion a year that needs to be closed.

It hopes to bridge this gap thanks to stronger economic growth, the identification of sources of efficiency, and an increase in federal transfers. Yet, no concrete plan to get there has been proposed, says the researcher.

The government is also announcing a reduction in the level of contributions to the Québec Pension Plan and the Québec Parental Insurance Plan in order to help taxpayers. Contributions to these funded plans vary based on the performance of the funds, notes the researcher.

This measure would allow contributors to save $80 next year. This represents a savings that is $0.25 lower than the cost of filling up a vehicle like a Toyota RAV4, with a 55-litre gas tank.

“If the Legault government really wanted to help families facing economic uncertainty and an increased cost of living, it would have been better off giving them a gas-tax holiday,” says Mr. Giguère. “Such a measure would have saved Quebecers hundreds of dollars a year, rather than a meagre $1.54 a week.”

The MEI recently recommended that the Quebec government use the $1.8-billion surplus that is sitting in the Green Fund 2.0 to reduce the gas tax.

A temporary elimination of the fuel tax would reduce the tax bill by 19.2 cents per litre of gas.

In September, a gap of 18.0 cents per litre separated the price of gas in Greater Montreal and the Canadian average. In Quebec City, this gap was 14.6 cents.

This gap costs drivers of sport utility vehicles an estimated $260 a year in the Montreal region, and $187 in the Quebec City region.

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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