The Quebec Government’s Unsustainable Asset Maintenance Deficit

Economic Note explaining why the government should let the private sector play a bigger role in order to avoid the accelerated deterioration of the province’s infrastructure

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This Economic Note was prepared by Gabriel Giguère, Senior Policy Analyst at the MEI. The MEI’s Taxation Series aims to shine a light on the fiscal policies of governments and to study their effect on economic growth and the standard of living of citizens.

Budget after budget, one thing is clear: the Quebec government’s assets, such as the road network and school buildings, among others, are in a state of decay. A new threshold was crossed with the tabling of the latest Québec Infrastructure Plan in March 2025, with the asset maintenance deficit totalling over $40 billion.(1) This rapid increase in required capital spending is unsustainable, having contributed to the downgrading of the province’s credit rating in April 2025.(2) It should prompt the government to take a new approach in order to avoid the accelerated deterioration of the province’s infrastructure, a concessions approach, such as the French model applied to road infrastructure (the type of asset with the biggest deficits in Quebec).

The Poor State of Public Infrastructure

The Quebec government owns several assets (buildings and infrastructure) across the province. Maintenance is projected over ten-year periods in the Québec Infrastructure Plan, thus aiming in principle to structure its management over a fairly long timeframe.(3)

Much of this infrastructure is maintained directly by the government. In order to set priorities between maintaining existing assets and building new ones, a list is updated annually in the Plan to track the state of infrastructure using a ranking from A (very good condition) to E (very poor condition).(4) The most recent Plan shows that over 40% of infrastructure under the responsibility of public bodies was graded D or E, which is to say, in an unsatisfactory condition.

For certain government departments, such as Education, Higher Education, Culture, and Tourism, as well as government administration, a majority of the infrastructure owned is actually in poor condition (D or E).

Admittedly, the maintenance of public infrastructure is expensive.(5) Over time, work must be carried out to ensure that it lasts and remains in good condition.(6) The asset maintenance deficit corresponds to the amount the Quebec government would need to inject to repair all the infrastructure it owns.

When asset maintenance is neglected in the medium and long term, the amount required for repairs increases rapidly, and if these investments are not made, the quality and use of public infrastructure can be compromised.

The Explosion of the Asset Maintenance Deficit

The Quebec government currently finds itself in a precarious situation in terms of maintaining its infrastructure. Despite a rapid increase in capital spending, which has grown by nearly 73% in just a few years,(7) deterioration has accelerated. This substantial expansion of the spending needed to repair this infrastructure is due to several factors, including underinvestment starting in the 1980s and during the following decades.(8)

Just from 2024 to 2025, the asset maintenance deficit increased by over $3 billion, mainly due to insufficient investment to stem the real deterioration of the Quebec road network. This sector is moreover responsible for 56% of the total deficit, although its share has diminished in recent years(9) (see Figure 1). Of this proportion, a little over half is due to the degradation of roadways, and 40% to degradation of highway system structures.(10)

If the government wanted to repair the entire Quebec road network, the operation would cost $22.5 billion, or more than a full year of capital spending devoted to maintenance and new construction for all public and parapublic infrastructure.

Maintenance First

The increase in the asset maintenance deficit should push the government to prioritize capital spending on the maintenance of existing infrastructure, rather than expanding the network with new construction.

This historical lack of prioritizing asset maintenance is due notably to governments’ weak incentives to maintain existing infrastructure, given the four-year electoral cycle. They are more likely to announce new projects that make headlines than to adopt a long-term vision and ensure the maintenance of assets in place.(11) This leads to asset depreciation and the consumption of capital, a phenomenon that is not observable in the short term, as long as infrastructure has not become completely unusable.

Over 40% of infrastructure under the responsibility of public bodies was graded D or E, in an unsatisfactory condition.

For example, the use of a highway over a long period of time leads the infrastructure to deteriorate if no maintenance is carried out. Little by little, the road surface cracks, and over time, potholes appear. If nothing is done, the deterioration gets worse and entails higher repair costs,(12) especially when there is a maintenance deficit. A similar observation applies to an office building from the 1960s that requires heavy repair work due to a lack of maintenance over the decades.

In this context of rapid infrastructure deterioration, the government is faced with a daunting challenge: invest in the maintenance of decaying assets without hurting Quebec’s credit rating by increasing spending too much.

Relying on the Private Sector

A different approach rests on the increased involvement of the private sector, which would help reduce the financial pressure exerted on the Quebec government. This involvement could take the form of concessions of sections of the road network.

The management and maintenance of certain stretches of roads would be entrusted to private organizations through public-private partnerships. This would introduce a user-pays policy for the maintenance of major highways, as was the case in Quebec before the elimination of tolls in the 1980s.(13) In order to change course and reduce Quebec’s asset maintenance deficit while ensuring adequate funding for major highways, the government would do well to examine the French model.

France adopted a concessions approach for its highways in the late 1950s.(14) This allowed private organizations to ensure the management and maintenance of the French highway network, which covers 9,310 kilometres.(15) Thus, the French government, instead of paying for roadwork, collected revenues—the equivalent of 11.2 billion euros in 2022.(16)

In the Montreal region, the Highway 25 and Highway 30 extensions were carried out through public-private partnerships.

The user-pays principle established by the concessions system allowed the infrastructure concerned to be maintained in a satisfactory condition. The concessions thus provide French drivers with highways in good condition, without weighing on the asset maintenance deficit or public finances, which would threaten the country’s credit rating and end up penalizing all taxpayers.(17) The costs required to maintain the highways infrastructure in good condition from now until the end of the concessions are estimated at from 5 to 6 billion euros, an amount which the French government will not have to pay out.(18)

Moreover, the organizations entrusted with maintaining and managing highway infrastructure have never been penalized for deficient maintenance, which is considered to be “objectively satisfactory.”(19) This is in sharp contrast to non-concessioned infrastructure, where maintenance is often judged to be deficient. Indeed, the latter are 3.4 times more likely to be in poor condition (classified 3 – presenting at least one major defect undermining their functioning) than privately managed infrastructure.(20)

Highways 25 and 30

Such a concessions model is not completely foreign to the province of Quebec. The private sector has already played, and still plays, a role in infrastructure development, notably for certain stretches of highway, although on a smaller scale. This has notably been the case in the Montreal region, where the Highway 25 and Highway 30 extensions were carried out through public-private partnerships.

In the case of Highway 25, the need to shorten the route for North Shore drivers pushed the government to set up a partnership with the private sector. This partnership, signed in 2007 for a 35-year period, enables quality road maintenance without increasing pressure on the asset maintenance deficit or the government’s budget. The government entrusted the private partner to design, build, finance, run, and maintain a section of the highway.(21) Through revenue sharing, the government collected $18.7 million in 2024-2025, and a total of $261.5 million in the fourteen years since the start of the project.(22)

The government adopted a similar approach in 2008 to design, build, finance, run, and maintain a stretch of Highway 30, notably between Vaudreuil-Dorion and La Prairie.(23) This concession, effective in 2012 and valid until 2042, has generated revenues for the Quebec government of $26.3 million in 2024, and $153.8 million since it opened(24) (see Figure 2).

While this approach is already tried and tested in terms of developing the road network, it should be adapted to the almost systematic maintenance of our highways, as is done in France. Such an approach would help reduce the asset maintenance deficit, which has been growing constantly since the Coalition Avenir Québec (CAQ) government was elected.(25)

Conclusion

A new governmental approach to capital spending is needed to address the growing pressure of the asset maintenance deficit on public finances. The French experience and the examples of Highways 25 and 30 show that a bigger role for the private sector and targeted reliance on road concessions can help.

Even though fees paid by drivers would increase, the current debt trajectory and the April 2025 downgrade justify adopting policies that will not place additional burden on society as a whole.