Overview
Minister of Finance Eric Girard presented the 2026-2027 Quebec government budget on March 18, 2026, titled ‘’A Responsible Budget Focused on Quebecers’ Priorities’’. This 8th budget from Minister Girard is sober and conservative, focusing on targeted investments in economic transformation, infrastructure, and public services.
Regarding public financial management, the government noted that the deficit for the 2025-2026 fiscal year is lower than initially projected in March 2025. Thanks to stronger-than-anticipated nominal GDP growth in 2025 and improved spending controls, the deficit previously estimated at 11.4 billion dollars (1.8% of GDP) now stands at 9.9 billion dollars (1.5% of GDP). For the 2026-2027 fiscal year, the deficit is estimated at 8.6 billion dollars, or 1.3% of GDP.
Even though the Quebec economy faces a volatile context characterized by rising protectionism and geopolitical conflicts, Minister Girard believes Quebec remains in a favorable position:
- The government forecasts a real GDP increase of 1.1% in 2026 and 1.4% in 2027.
- The standard of living gap between Quebec, Ontario, and the rest of Canada has narrowed. While it was 15.9% in 2018, the real GDP per capita gap with Ontario decreased to 10.2% in 2024.
- Between 2018 and 2024, household purchasing power improved faster than in Ontario (+9.2% vs +5.1%).
Although this exercise constitutes the final budget of the CAQ government before the next election in October 2026, typical election-year spending is virtually non-existent. Surprisingly, there are very few measures addressing taxpayer purchasing power, a pillar for the government since 2018. Notably, a sum of 250 million dollars over five years is allocated in the budget to allow the next Premier to implement measures following the election of the new CAQ leader on April 12, 2026.
Key Figures
- Revenue: 166.49 billion dollars (compared to 160.53 billion in 2025-2026)
- Total Expenditures: 175.10 billion dollars
- Deficit: 8.6 billion dollars (balanced budget target: 2029-2030).
- Generations Fund: Currently at 16.6 billion dollars. Projected to reach 29.1 billion dollars by March 31, 2031.
- Contingency Reserve: 2 billion dollars to cover unforeseen expenses or mitigate the effects of slower-than-expected economic growth.
- Transition Fund: 1.25 billion dollars over five years to allow the new Premier to implement their priority measures following the election of the new CAQ leader on April 12, 2026.
Sector Breakdown
Business Adaptation to the New Economic Context
- 375 million dollars over five years to continue supporting high-potential business investments through the Economic Development Fund at Investissement Quebec.
- Transformation of the Natural Resources and Energy Capital Fund into a Critical and Strategic Minerals Fund (CSMF). An additional 1.0 billion dollars in new capital will be added to the fund, bringing its total capitalization to 2.5 billion dollars. This new fund, managed by Investissement Quebec, will primarily support projects in the operational phase. Further details will be provided in a subsequent government announcement. Legislative changes will also be required in the budget omnibus bill to be adopted in the coming weeks.
- 1 billion dollars increase in the capitalization of the Quebec Business Growth Fund (FCEQ) to promote the development of local businesses and retain corporate headquarters in Quebec.
- Creation of a 500-million-dollar fund to provide loan guarantees so Indigenous communities can participate financially in economic projects.
- Establishment of a fifth innovation zone, the Mining Innovation Zone, in Rouyn-Noranda, Abitibi-Témiscamingue.
- 78.9 million dollars over three years to increase investment in Quebec tourism attractions and renew the Support Program for International Sporting Events.
- 164.5 million dollars to support forestry companies facing sector difficulties, including a 60 million dollar working capital assistance program for wood processing companies undertaking investment projects.
- 268.2 million dollars over five years for the growth of the Quebec audiovisual industry, specifically increasing SODEC’s resources to encourage the production of exportable Quebec content.
- 50 million dollars to promote engineering and information technology disciplines within the higher education system.
Public Services
- 756.2 million dollars over five years to support access to medication and fund treatments in health facilities.
- 200 million dollars over five years to reduce surgical waitlists.
- 74 million dollars over two years to strengthen workforce attraction in the education sector.
- 28.6 million dollars to maintain employment integration efforts for immigrants, particularly in the healthcare network.
- 750 million dollars over five years to improve prevention and intervention in civil security, correctional services, fire safety, and policing.
- 396.5 million dollars to convert 5,000 non-subsidized childcare spaces into subsidized spaces starting in 2026-2027.
- Capping school tax growth at 3%.
- 5 billion dollars increase over six years for infrastructure spending under the Quebec Infrastructure Plan (QIP).
Fiscal Measures
- Capping school tax growth at 3%.
- Introduction of an Adaptation component to the Rénoclimat program, with 425 million dollars over five years to support insulation and airtightness work.
- 158.9 million dollar increase over four years for the LogisVert program to assist households with the purchase and installation of heat pumps and energy-efficient appliances.
Analysis
The 2026-2027 budget is a unique transitional exercise. Given the current political context, Minister Girard’s room for maneuver was clearly limited, preventing him from deploying the bold measures necessary to reverse polling trends and regain voter support for the CAQ.
The exercise reveals a striking paradox: the budgetary directions often run counter to the positions held by the CAQ leadership candidates who will take the helm of the state in mid-April. While Christine Fréchette and Bernard Drainville have both questioned the interventionist approach that defined CAQ governance over the last eight years, this budget maintains and even accentuates that trend—a contradiction highlighted by the Parti Québécois.
Furthermore, the near-total absence of new measures to alleviate the cost of living or reduce the tax burden on taxpayers is surprising. This has historically been a core pillar of the Coalition Avenir Québec, an omission that Conservative Party of Quebec leader Éric Duhaime did not fail to denounce vigorously.
Among opposition parties, the diagnosis is unanimous: this budget is considered an unfinished exercise. This perception is crystallized by the creation of a 1.25-billion-dollar reserve left to the discretion of the future Premier to finance their own priorities.
Finally, sector-specific criticisms are widespread:
- Quebec Liberal Party leader Charles Milliard criticized the recycling of past announcements and questioned the government’s optimistic economic growth forecasts, calling them disconnected from the slowdowns observed in Europe.
- Québec Solidaire rejected the budget, stating that it does not respond to the real priorities of Quebecers.
What’s Next?
A fiscal omnibus bill will be tabled shortly to adopt the legislative changes required to implement the budget. This will be followed by the consideration of estimates, during which each department must account for its spending and activities before parliamentary committees.
Uncertainty remains regarding the parliamentary calendar following the election of the new CAQ leader. A prorogation of the National Assembly after April 12 is quite possible, which could complicate the adoption of certain legislative texts before the end of the session scheduled for mid-June 2026.
It will be crucial to monitor the first actions of the new CAQ leader as Premier. New fiscal measures could potentially be announced via tax bulletins or an economic update before the end of the parliamentary session in June.
