Quebec on track to meet objectives for fiscal year, Finance Minister says

The Quebec government is on track to meet its objectives for the fiscal year – including a balanced budget – despite lowered expectations for economic growth in the province, Finance Minister Carlos Leitao says.

"Our economic plan is still achievable," Mr. Leitao said Friday after the government released a fiscal update for the three months ended June 30.

"The Quebec economy continues to progress at a sustained rhythm."

The update says the deficit in the first quarter of fiscal 2016-2017 dropped to $529-million from $675-million in the year-earlier period.

Deficits in the first quarter of the fiscal year are not unusual and the government is on target for zero-deficit status by the end of the year, Mr. Leitao – former chief economist at the Laurentian Bank of Canada – said on a media conference call.

The province is counting on a bump in Quebec exports to the United States resulting from higher private-sector investment as the recovery south of the border firms up, he said.

Desjardins Securities recently revised downward its GDP growth forecast for Quebec to 1.2 per cent in 2016 and 1.7 per cent next year. Desjardins's 1.2-per-cent outlook for 2016 is down from 1.5 per cent in January.

Mr. Leitao said on Friday his government will provide its own updated GDP forecast in the fall.

Total revenues in Quebec as of June 30, 2016, were $19-billion, an increase of $801-million – or 4.4 per cent – over revenues a year earlier.

Program spending in the country's second-most populous province increased to $17.75-billion from $17.4-billion.

Health and social services expenditures in the three-month period of April to June rose to $9.1-billion from $8.7-billion, while education and culture spending was steady at $4.81-billion.

Debt-servicing gobbled up $1.93-billion in the quarter, down from $1.98-billion.

The government said it expects to contribute $2-billion to the Generations Fund, a special fund created in 2006 aimed at reducing the province's net debt. The fund is expected to reach $20-billion by 2020, Mr. Leitao said.