Quebec would have a surplus of $1 billion this year if it had returned to its pre-pandemic spending levels, says the MEI

Montreal, April 24, 2025 – The Quebec government would have a budget surplus today if its spending had returned to the growth trajectory of the Couillard government after the pandemic, according to an Economic Note published today by the MEI.

“After the pandemic was over, the Legault government never returned to its previous spending levels,” explains Gabriel Giguère, senior policy analyst at the MEI and the author of the study. “We find ourselves facing chronic deficits today, not because of the situation, but as a result of deliberate choices.”

Finance Minister Eric Girard is projecting a deficit of $13.6 billion this year, the biggest deficit in the province’s history.

According to Minister Girard, Quebec will not return to budgetary balance before 2029-2030, or 10 years after this government started its run of consecutive deficits, if the current trajectory is maintained.

The MEI estimates that by bringing spending back to its pre-pandemic trajectory, the government could have returned to a balanced budget in 2023-2024, with a surplus of $2.4 billion.

That year, the Legault government instead ran a deficit of $8.0 billion.

Last year, the government would have run a surplus of $4.0 billion instead of a deficit of $10.4 billion.

And this year, the surplus would have been $912 million, instead of a projected deficit of $13.6 billion.

According to the researcher, this is a typical example of what is known in economics as the “ratchet effect.”

“After the pandemic, the government got used to living beyond its means, and transformed temporary spending into permanent spending,” explains Mr. Giguère. “What would have shocked the population in the past is now seen as normal, even if it undermines the soundness of provincial finances.

“This clearly illustrates the current government’s lack of discipline in the management of public finances.”

S&P Global Ratings downgraded Quebec’s credit rating from AA- to A+ last week, citing the growth in personnel spending as a key contributor to the province’s deteriorating financial situation.

The MEI study is available here.

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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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