# EDGAR Filing Document

**Accession Number:** 0000722803
**File Stem:** 0001062993-25-015831
**Filing Date:** 2025-9
**Character Count:** 64958
**Document Hash:** 02555577182f9fdb1cf41a7b2871cd8d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001062993-25-015831.hdr.sgml**: 20250929

**ACCESSION NUMBER**: 0001062993-25-015831

**CONFORMED SUBMISSION TYPE**: 18-K/A

**PUBLIC DOCUMENT COUNT**: 12

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250929

**DATE AS OF CHANGE**: 20250929

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** QUEBEC
- **CENTRAL INDEX KEY:** 0000722803
- **STANDARD INDUSTRIAL CLASSIFICATION:** FOREIGN GOVERNMENTS [8888]
- **ORGANIZATION NAME:** International Corp Fin
- **EIN:** 000000000
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** 18-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 002-86339
- **FILM NUMBER:** 251355163

**BUSINESS ADDRESS:**
- **STREET 1:** 12 ST-LOUIS ST
- **STREET 2:** MINISTERE DES FINANCES
- **CITY:** QUEBEC QC CANADA GIR 5L3
- **STATE:** A8
- **ZIP:** 00000

**MAIL ADDRESS:**
- **STREET 1:** 12 ST-LOUIS ST
- **STREET 2:** MINISTERE DES FINANCES
- **CITY:** QUEBEC QC CANADA GIR 5L3
- **STATE:** A8
- **ZIP:** 00000

------

**UNITED STATES<br>SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 18-K/A**

**For Foreign Governments and Political Subdivisions Thereof**

**AMENDMENT NO. 3**

**to**

**ANNUAL REPORT**

of

**<u>QUÉBEC</u>**

(Name of Registrant)

Date of end of last fiscal year: **<u>March 31, 2025</u>**

**<u>SECURITIES REGISTERED\*</u>**

<br> (As of close of fiscal year)

---

| | | |
|:---|:---|:---|
|  <br> Title of issue | Amounts as to<br> which registration<br> is effective | Names of<br> exchanges on<br> which registered |
|  N/A | N/A | N/A |

---

 **(As of close of fiscal year)**

Name and address of person authorized to receive notices and<br>communications from the Securities and Exchange Commission:

David Brulotte

*Délégation générale du Québec*<br>One Rockefeller Plaza<br>26<sup>th</sup> Floor<br><u>New York, N.Y. 10020-2102</u>

Copies to:

---

| | |
|:---|:---|
| Catherine M. Clarkin | Guillaume Pichard |
| *Sullivan & Cromwell LLP* | *Ministère des Finances du Québec* |
| 125 Broad Street | 390, boulevard Charest Est |
| <u>New York, N.Y. 10004-2498</u> | <u>Québec, Québec, G1K 3H4, Canada</u> |

---

\* The Registrant is filing this Annual Report on a voluntary basis.

------

The undersigned registrant hereby amends its Annual Report on Form 18-K for the fiscal year ended March 31, 2025 (the "Annual Report") as follows:

The following additional exhibit is hereby added to the Annual Report:

[Exhibit: (99.4)](exhibit99-4.htm) [Report on Québec's Financial Situation - First Quarter of 2025-2026.](exhibit99-4.htm)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment no. 3 to be signed on its behalf by its authorized agent.

---

| | |
|:---|:---|
| QUÉBEC | QUÉBEC |
| By: | /s/ Guillaume Pichard |
| Name: | Guillaume Pichard |
| Title: | Assistant Deputy Minister |

---

Date: September 29, 2025

------

## Exhibit 99.4

------

![](exhibit99-4xu002.jpg)

**Exhibit 99.4**

**Highlights**

Economic growth continues in Québec. Real GDP grew by 1.2% for the first six months of 2025, compared with the corresponding period in 2024. However, the Québec economy is showing signs of slowing down due to the current trade dispute.

Based on results as at June 30, 2025, recent developments in economic activity, and currently known factors that will impact the financial framework by the end of the fiscal year, the anticipated accounting deficit<sup>1</sup> for 2025-2026 remains unchanged from the 2025-2026 budget at $11.4 billion (1.8% of GDP). The contingency reserve of $2.0 billion included in the financial framework is also maintained.

▪ Taking into account deposits of dedicated revenues of $2.2 billion in the Generations Fund, the budgetary deficit within the meaning of the *Balanced Budget Act* is maintained at $13.6 billion (2.2% of GDP).

Revenues are adjusted upward due to the recurrence of higher-than-expected results observed at the end of fiscal 2024-2025 in tax revenues, increased revenues from government enterprises, and the favourable impact on federal transfers of the federal personal income tax cut that came into effect last July. These adjustments are offset by an upward adjustment to debt service due, in particular, to higher-than-anticipated global interest rates at the beginning of the fiscal year. Portfolio expenditures are maintained at the same level as in the 2025-2026 budget.

As a result, revenues are expected to reach $156.8 billion for the whole year, and expenditures, including the contingency reserve, are expected to stand at $168.2 billion.

The net debt burden is expected to stand at 40.4% of GDP as at March 31, 2026, the same level as in the 2025-2026 budget.

Moreover, as at June 30, 2025, borrowings issued since April 1, 2025 amounted to $12.9 billion, or 44% of the forecast financing program.<sup>2</sup>

![](exhibit99-4xu003.jpg)

(1) The contingency reserve, as well as deposits of dedicated revenues in the Generations Fund, are presented under expenditures for illustrative purposes.<br> (2) This is the operating surplus (deficit) as presented in the public accounts.<br> (3) Including $2.2 billion deposits of dedicated revenues in the Generations Fund, the budgetary deficit within the meaning of the *Balanced Budget Act* stands at $13.6 billion.<br>

<br> 1. This is the operating surplus (deficit) as presented in the public accounts. 2. Long-term borrowings contracted between April 1, 2025 and June 30, 2025.

------

**Recent developments in the economic situation** <br>

Economic growth continues in Québec. However, the Québec economy is showing signs of slowing down due to the current trade dispute. After a 1.3% increase in 2024, real GDP posted growth of 1.2% during the first two quarters of 2025, compared with the corresponding period in 2024.

Since the beginning of 2025, inflation has continued to slow down in both Québec and Canada.

▪ After eight months, the consumer price index (CPI) showed average growth of 2.1% in Québec (2.0% in Canada), compared with the corresponding period in 2024 (2.3% in Québec for 2024).

The Bank of Canada reduced its policy rate by 25 basis points in September 2025 to 2.50%, in a context of slowing Canadian economic growth and easing inflation-related risks. This was the first rate cut in Canada since March 2025.

In Québec, nominal GDP posted growth of 5.3% during the first two quarters of 2025,<sup>3</sup> compared with the corresponding period in 2024 (5.4% in 2024).

In 2025, the labour market slowed. On average, for the first eight months of 2025,<br>the unemployment rate in Québec stood at 5.8%, while it averaged 5.3% for 2024 as a whole.

▪ Despite this growth, the unemployment rate in Québec (6.8% on average in 2025) remains below the Canadian average. The employment rate for people aged 15 to 64 averaged 77.4% in Québec in 2025 and was therefore the highest in the country (74.2% in Canada)..

For the first two quarters of 2025 compared with the same period in 2024, wages and salaries grew by 5.3% (5.9% in 2024).

Household consumption (in nominal terms) posted growth of 6.3% during the first two quarters of 2025, compared with the corresponding period in 2024 (5.7% in 2024).

On the business side, the net operating surplus of corporations rose by 2.9% during the first two quarters of 2025, compared with the same period in 2024 (-0.1% in 2024).

![](exhibit99-4xu007.jpg) <br>

<br> 3. Strong growth in nominal GDP stems from increased domestic demand, notably with regard to residential investment and household consumption.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 2 \| 23

------

**Summary of results and budgetary outlook for 2025-2026**

**► Results as at June 30, 2025**

For the first three months of 2025-2026, the accounting deficit stood at $1.5 billion. This is a $717-million improvement compared with the same period last year.

This deficit is explained by the following factors:

▪ revenues of $39.5 billion, which were up 6.9% compared with the same period last year. This increase is due, in particular, to higher own-source revenues, driven by favourable developments in economic activity, particularly wages and salaries and household consumption;

▪ expenditures of $40.9 billion, which grew by 4.7% compared with the same period last year. This growth is mostly attributable to portfolio expenditures (5.5%), particularly the Santé et Services sociaux, Éducation, Famille, as well as Transports et Mobilité durable portfolios.

Moreover, the budgetary deficit within the meaning of the *Balanced Budget Act*, that is, after deposits of dedicated revenues of $497 million in the Generations Fund, stands at $2.0 billion. <br>

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** | **Summary of results as at June 30, 2025 and budgetary outlook for 2025-2026** |
| (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **March 2025**<br>**budget** | **March 2025**<br>**budget** |  | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** |
|  | **2024-<br>2025** | **2025-**<br> **2026** | **Change<br>(M$)** | ***Change<br>(%)*** |  | **Level<br>(M$)** | ***Change***<br>***(%)*** |  | **Adjustment**<br>**(M$)** | **Level<br>(M$)** | ***Change***<br>***(%)*** |
| Own-source revenue | 29 744 | 32 023 | 2 279 | *7.7* | | 125 732 | *1.0* | | 350 | 126 082 | *0.4* |
| Federal transfers | 7 165 | 7 438 | 273 | *3.8* | | 30 610 | *-0.1* | | 130 | 30 740 | *0.8* |
| **Total revenue** | **36 909** | **39 461** | **2 552** | ***6.9*** |  | **156 342** | ***0.7*** |  | **480** | **156 822** | ***0.5*** |
| Portfolio expenditures | -36 331 | -38 339 | -2 008 | *5.5* | | -156 102 | *1.8* | |  | -156 102 | *3.2* |
| Debt service | -2 755 | -2 582 | 173 | *-6.3* | | -9 670 | *-1.9* | | -480 | -10 150 | *1.8* |
| **Total expenditure** | **-39 086** | **-40 921** | **-1 835** | ***4.7*** |  | **-165 772** | ***1.5*** |  | **-480** | **-166 252** | ***3.1*** |
| Contingency reserve |  |  |  | *-* | | -2 000 | *-* | |  | -2 000 | *-* |
| **ACCOUNTING SURPLUS (DEFICIT)<sup>(2)</sup>** | **-2 177** | **-1 460** | **717** | ***-*** |  | **-11 430** | ***-*** |  | **-** | **-11 430** | ***-*** |
| Deposits of dedicated revenues in the Generations Fund | -469 | -497 | -28 | *-* | | -2 177 | *-* | |  | -2 177 | *-* |
| **BUDGETARY BALANCE<sup>(3)</sup>** | **-2 646** | **-1 957** | **689** | ***-*** |  | **-13 607** | ***-*** |  | **-** | **-13 607** | ***-*** |

---

(1) The percentage change has been updated on the basis of the 2024-2025 results published in the *Public Accounts 2024-2025*.

(2) This is the operating surplus (deficit) as presented in the public accounts.

(3) Budgetary balance within the meaning of the *Balanced Budget Act*.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 3 \| 23

------

**► Budgetary outlook for 2025-2026**

Based on the results as at June 30, 2025, recent developments in economic activity, and currently known factors that will impact the financial framework by the end of the fiscal year, the anticipated accounting deficit for 2025-2026 remains unchanged from the 2025-2026 budget at $11.4 billion.

▪ This deficit includes a $2.0 billion contingency reserve.

Revenues are adjusted upward by $480 million since the 2025-2026 budget. As a result, they stand at $156.8 billion, with annual growth of 0.5%.

▪ Own-source revenue are adjusted upward by $350 million due, among other things, to the recurrence of more favourable-than-expected results at the end of 2024-2025, particularly in personal and corporate income taxes, as well as the increase in revenues from government enterprises.

▪ Federal transfers are adjusted upward by $130 million due to the federal personal income tax cut that came into effect last July, which has the effect of reducing the value of the Québec special abatement and increasing Québec's cash transfers.<sup>4</sup>

Expenditures are adjusted upward by $480 million since the 2025-2026 budget. As a result, they stand at $166.3 billion, with annual growth of 3.1%.

▪ Portfolio expenditures remain unchanged. However, expenditures in the Éducation portfolio are adjusted upward by $250 million to fund the needs of school service centres and school boards. The $540-million reinvestment announced in the summer of 2025 is higher than the adjustment in expenditures for this portfolio for the fiscal year since the school year spans two fiscal years and part of the reinvestment comes from sums administered by the Ministère de l'Éducation, the disbursement of which has been accelerated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ This increase is offset by an equivalent central reallocation of expenditures during the year.

▪ Debt service is adjusted upward by $480 million, mainly due to higher-than-anticipated global interest rates at the beginning of the fiscal year and a lower-than-expected return on the Retirement Plans Sinking Fund (RPSF) in 2024-2025.

Moreover, the budgetary deficit within the meaning of the *Balanced Budget Act*, that is, after deposits of dedicated revenues of $2.2 billion in the Generations Fund, stands at $13.6 billion. <br>

**► Additional information**

The net debt burden is expected to stand at 40.4% of GDP as at March 31, 2026, the same level as in the 2025-2026 budget. <br>

<br> 4. The value of the Québec special abatement is shown as a deduction of federal transfers.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 4 \| 23

------

**Revenue**

**Own-source revenue**

![](exhibit99-4xu001.jpg)

**► Results as at June 30, 2025**

As at June 30, that is, for the first three months of 2025-2026, own-source revenue stood at $32.0 billion. This represents an increase of $2.3 billion (7.7%) compared with the same period last year.

**Tax revenue** rose by $2.1 billion (9.0%) to $25.7 billion due, in particular, to increases of:

▪ $989 million (8.9%) in **personal income tax**, attributable, in particular, to 5.3% growth in wages and salaries during the first two quarters of 2025 and growth in instalment payments related to 2025 tax returns;

▪ $60 million (2.7%) in **contributions for health services** attributable, in particular, to wages and salaries, which grew by 5.3% in the first two quarters of 2025;

▪ $563 million (21.0%) in **corporate tax revenues**, linked to a 2.9% rise in the net operating surplus of corporations during the first two quarters of 2025 and in corporate instalment payments;

▪ $13 million (4.5%) in **school property tax** revenues due to changes in local needs funding, which takes into account the anticipated growth in the number of students and in the cost of goods and services financed by school property tax;

▪ $510 million (7.0%) in **consumption taxes** attribuable mainly to growth of 6.3% in household consumption for the first two quarters of 2025 and growth of 21.3% in residential construction investment during the same period. <br>

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 5 \| 23

------

**Other own-source revenue** increased by $133 million (2.5%) to $5.4 billion, due to:

▪ an $80-million (-4.9%) decrease in **duties, permits and royalties** stemming, in particular, from lower revenues from the auctioning of GHG emission allowances;

▪ a $213-million (5.9%) increase in **miscellaneous revenues** attributable, in particular, to higher revenues from penalties, fines, and recoveries.

**Revenue from government enterprises** rose by $11 million (1.2%) to $926 million.

▪ This change is mainly attributable to an increase in Investissement Québec's results, due, in particular, to higher stock market prices. <br>

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** | **Own-source revenue** |
| (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **March 2025**<br>**budget** | **March 2025**<br>**budget** |  | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** |
|  | **2024-<br>2025** | **2025-<br>2026** | **Change**<br>**(M$)** | ***Change<br>(%)*** |  | **Level<br>(M$)** | ***Change<br>(%)*** |  | **Adjustment**<br> **(M$)** | **Level<br>(M$)** | ***Change<br>(%)*** |
| Income and <br>property taxes |  |  |  |  |  |  |  |  |  |  |  |
| - Personal income tax | 11 090 | 12 079 | 989 | *8.9* | | 46 944 | *3.3* | | 110 | 47 054 | *3.0* |
| - Contributions for health services | 2 225 | 2 285 | 60 | *2.7* | | 9 242 | *3.2* | | -100 | 9 142 | *3.3* |
| - Corporate taxes | 2 686 | 3 249 | 563 | *21.0* | | 12 491 | *-3.8* | | 215 | 12 706 | *-4.8* |
| - School property tax | 291 | 304 | 13 | *4.5* | | 1 346 | *14.1* | |  | 1 346 | *12.5* |
| Consumption taxes | 7 320 | 7 830 | 510 | *7.0* | | 28 922 | *3.4* | | 50 | 28 972 | *2.1* |
| **Tax revenue** | **23 612** | **25 747** | **2 135** | ***9.0*** |  | **98 945** | ***2.5*** |  | **275** | **99 220** | ***1.8*** |
| Duties, permits and royalties | 1 630 | 1 550 | -80 | *-4.9* | | 6 220 | *5.1* | |  | 6 220 | *0.5* |
| Miscellaneous revenue | 3 587 | 3 800 | 213 | *5.9* | | 15 299 | *-8.2* | |  | 15 299 | *-5.9* |
| **Other own-source revenue** | **5 217** | **5 350** | **133** | ***2.5*** |  | **21 519** | ***-4.7*** |  |  | **21 519** | ***-4.1*** |
| **Total own-source revenue** **excluding revenue from government enterprises** | **28 829** | **31 097** | **2 268** | ***7.9*** |  | **120 464** | ***1.1*** |  | **275** | **120 739** | ***0.7*** |
| Revenue from <br>government enterprises | 915 | 926 | 11 | *1.2* | | 5 268 | *-2.6* | | 75 | 5 343 | *-6.1* |
| **TOTAL** | **29 744** | **32 023** | **2 279** | ***7.7*** |  | **125 732** | ***1.0*** |  | **350** | **126 082** | ***0.4*** |

---

(1) The percentage change has been updated on the basis of the 2024-2025 results published in the *Public Accounts 2024-2025*.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 6 \| 23

------

**► Budgetary outlook for 2025-2026**

Own-source revenue is expected to stand at $126.1 billion in 2025-2026 (annual growth of 0.4%). This represents an upward adjustment of $350 million from the 2025-2026 budget forecast.

**Tax revenue** are adjusted upward by $275 million. This adjustment is mainly due to:

▪ the $110-million upward adjustment to **personal income tax** stemming, in particular, from the recurrence of higher-than-expected source deductions observed at the end of 2024-2025 due to the 0.3-percentage-point upward revision in wages and salaries in the first quarter of 2025;

▪ the $100-million downward adjustment to **contributions for health services** attributable, in particular, to the recurrence of lower-than-expected results recorded at the end of 2024-2025;

▪ the $215-million upward adjustment to **corporate taxes** due to the recurrence of higher-than-expected revenues recorded at the end of 2024-2025 and the 6.1-percentage-point upward adjustment to growth in the net operating surplus of corporations in the second quarter of 2025;

▪ the $50-million upward adjustment to **consumption taxes** due to the recurrence of lower-than-expected input tax rebates recorded in 2024-2025, reflecting a slowdown in business production due to the current economic uncertainty.

**Revenue from government enterprises** is adjusted upward by $75 million, largely due to the increase in Hydro-Québec's results, related mainly to higher net export revenues. <br>

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 7 \| 23

------

&nbsp;&nbsp;&nbsp;&nbsp; **Composition of own-source revenue excluding revenue from government enterprises**<br> Own-source revenue excluding revenue from government enterprises consists mainly of tax revenue, that is, personal income tax, contributions for health services, corporate taxes, school property tax and consumption taxes.<br> Changes in own-source revenue generally reflect changes in economic activity in Québec and modifications in the tax system. Own-source revenue excluding revenue from government enterprises also includes other sources of revenue:<br> duties, permits and royalties, in particular revenue from the carbon market;<br> miscellaneous revenue, such as investment revenue, services rendered, as well as fines, penalties and recoveries.<br>

&nbsp;&nbsp;&nbsp;&nbsp; **Composition of revenue from government enterprises**<br> Government enterprises consist of public corporations that play a commercial role, have managerial autonomy and are financially self-sufficient.<br> Revenue from government enterprises corresponds in large part to the net earnings of these enterprises.

**Own-source revenue as at June 30, 2025**<br> (billions of dollars and percentage of total own-source revenue) <br>

![](exhibit99-4x020.jpg)<br>

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 8 \| 23

------

**Revenue**

**Federal transfers**

![](exhibit99-4xu004.jpg)

**► Results as at June 30, 2025**

As at June 30, for the first three months of 2025-2026, federal transfers totalled $7.4 billion. This represents an increase of $273 million (3.8%) compared with the same period last year. This variation is explained, among other things, by the 5.0% growth in the Canada Health Transfer.

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** | **Federal transfers** |
| (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **March 2025**<br>**budget** | **March 2025**<br>**budget** |  | **New** <br>**estimate<sup>(1)</sup>** | **New** <br>**estimate<sup>(1)</sup>** | **New** <br>**estimate<sup>(1)</sup>** |
|  | **2024-<br>2025** | **2025-<br>2026** | **Change**<br>**(M$)** | ***Change<br>(%)*** |  | **Level<br>(M$)** | ***Change<br>(%)*** |  | **Adjustment<br>(M$)** | **Level<br>(M$)** | ***Change<br>(%)*** |
| Equalization | 3 329 | 3 392 | 63 | *1.9* | | 13 567 | *1.9* | |  | 13 567 | *1.9* |
| Health transfers | 2 120 | 2 235 | 115 | *5.4* | | 8 942 | *6.1* | | 66 | 9 008 | *6.8* |
| Transfers for post-secondary education and other social programs | 338 | 333 | -5 | *-1.5* | | 1 330 | *-1.5* | | 40 | 1 370 | *1.5* |
| Other programs | 1 378 | 1 478 | 100 | *7.3* | | 6 771 | *-10.3* | | 24 | 6 795 | *-8.2* |
| **TOTA`L** | **7 165** | **7 438** | **273** | ***3.8*** |  | **30 610** | *-**0.1*** |  | **130** | **30 740** | ***0.8*** |

---

(1) The percentage change has been updated on the basis of the 2024-2025 results published in the *Public Accounts 2024-2025*.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 9 \| 23

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**►** **Budgetary outlook for 2025-2026**

Revenue from federal transfers is expected to reach $30.7 billion in 2025-2026 (annual growth of 0.8%). This represents an upward adjustment of $130 million from the 2025-2026 budget forecast due to the federal personal income tax cut that came into effect last July, which had the effect of reducing the value of the Québec special abatement and increasing Québec's cash transfers.<sup>5</sup>

&nbsp;&nbsp;&nbsp;&nbsp; **Composition of federal transfers**<br> Revenue from federal transfers consists of federal government revenues paid to Québec under the *Federal-Provincial Fiscal Arrangements Act*, in addition to revenues from other programs under bilateral agreements.<br> These revenues mainly come from:<br> the equalization program;<br> the Canada Health Transfer (CHT);<br> the Canada Social Transfer (CST);<br> other programs resulting from agreements with the federal government in various fields (e.g.: immigrant integration, early learning and childcare, labour market and infrastructure).<br>

---

| |
|:---|
| **Federal transfers as at June 30, 2025**<br> (billions of dollars and percentage of total revenue from federal transfers) |
| ![](exhibit99-4x025.jpg) |

---

<br> 5. The value of the Québec special abatement is shown as a deduction of federal transfers.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 10 \| 23

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**E** **xpenditure**

**Portfolio expenditures and debt service**

![](exhibit99-4xu005.jpg)

**► Results as at June 30, 2025**

As at June 30, for the first three months of 2025-2026, expenditures totalled $40.9 billion. This represents an increase of $1.8 billion (4.7%) compared with the same period last year.

**Portfolio expenditures** rose by $2.0 billion (5.5%) to $38.3 billion. In addition to the expected change in costs related to the delivery of public services, the growth observed as at June 30, 2025 can be explained by these factors:

▪ expenditure in the **Santé et Services sociaux** portfolio increased by $602 million (3.8%) to $16.3 billion. This increase is attributable, in particular, to changes in compensation and expenditures related to drugs;

▪ expenditure in the **Éducation** portfolio increased by $234 million (3.7%) to $6.6 billion. This increase stems, in particular, from changes in the remuneration of staff at school service centres and school boards, resulting from salary indexations and an increase in the school clientele;

▪ expenditure in the **Enseignement supérieur** portfolio increased by $157 million (5.8%) to $2.9 billion. This increase is due, in particular, to changes in the remuneration of higher education staff, resulting from salary indexations;

▪ expenditure in the **Famille** portfolio increased by $352 million (17.3%) to $2.4 billion. This increase is mainly due to lower expenditures in 2024-2025 as a result of advance payments in 2023-2024 to fund subsidized educational childcare services;

▪ expenditure in the **Transports et Mobilité durable** portfolio increased by $432 million (27.0%) to $2.0 billion. This increase stems, in particular, from higher subsidies granted for public transit infrastructure projects; <br>

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 11 \| 23

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▪ expenditure in the **Emploi et Solidarité sociale** portfolio increased by $47 million (3.2%) to $1.5 billion. This increase is due, in particular, to higher expenditures in the Québec Fund for Social Initiatives and to expenditures related to the work premium tax credit;

▪ expenditure in the **Affaires municipales et Habitation** portfolio increased by $72 million (8.2%) to $955 million. This variation is due, among other things, to higher subsidies for affordable housing;

▪ expenditure in the **Économie, Innovation et Énergie** portfolio increased by $50 million (5.6%) to $938 million.This increase stems mainly from higher tax credits, including the tax credit for investment and the tax credit for scientific research and experimental development;

▪ expenditure in the **Environnement, Lutte contre les changements climatiques, Faune et Parcs** portfolio decreased by $92 million (-25.9%) to $263 million. This variation is due, in particular, to lower subsidies of the Roulez vert program explained by the decrease in the sales of new electric vehicles and the gradual reduction in the program's financial assistance;

▪ expenditure in **other portfolios** increased by $154 million (3.6%) to $4.5 billion.

**Debt service** expenditure decreased by $173 million (-6.3%) to $2.6 billion. This decrease is explained by losses on the disposal of assets that were lower than last year for the first quarter. As part of the management of investment activities of the Sinking Fund for Government Borrowings, gains or losses on the disposal of assets depend on changes in interest rates and market behaviour.

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** | **Expenditure** |
| (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) | (unaudited data, millions of dollars, year-over-year change) |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** |
|  | **April to June** | **April to June** | **April to June** | **April to June** |  | **March 2025**<br>**budget** | **March 2025**<br>**budget** |  | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** |
|  | **2024-<br>2025** | **2025-**<br> **2026** | **Change<br>(M$)** | ***Change<br>(%)*** |  | **Level<br>(M$)** | ***Change***<br>***(%)*** |  | **Adjustment<br>(M$)** | **Level<br>(M$)** | ***Change***<br>***(%)*** |
| Santé et <br>Services sociaux | 15 690 | 16 292 | 602 | *3.8* | | 65 527 | *3.0* | |  | 65 527 | *2.1* |
| Éducation | 6 352 | 6 586 | 234 | *3.7* | | 23 517 | *2.2* | | 250 | 23 767 | *1.8* |
| Enseignement supérieur | 2 721 | 2 878 | 157 | *5.8* | | 11 311 | *2.1* | |  | 11 311 | *-0.6* |
| Famille | 2 039 | 2 391 | 352 | *17.3* | | 9 308 | *7.2* | |  | 9 308 | *3.3* |
| Transports et <br>Mobilité durable | 1 600 | 2 032 | 432 | *27.0* | | 7 308 | *-3.5* | |  | 7 308 | *-4.9* |
| Emploi et <br>Solidarité sociale | 1 470 | 1 517 | 47 | *3.2* | | 5 804 | *0.1* | |  | 5 804 | *1.7* |
| Affaires municipales<br>et Habitation | 883 | 955 | 72 | *8.2* | | 5 623 | *9.3* | |  | 5 623 | *14.5* |
| Économie, Innovation<br>et Énergie | 888 | 938 | 50 | *5.6* | | 4 521 | *-6.9* | |  | 4 521 | *-4.0* |
| Environnement, <br>Lutte contre les changements climatiques, Faune <br>et Parcs | 355 | 263 | -92 | *-25.9* | | 2 436 | *0.0* | |  | 2 436 | *11.7* |
| Other portfolios | 4 333 | 4 487 | 154 | *3.6* | | 20 747<sup>(2)</sup> | *-2.2* | | -250 | 20 497<sup>(2)</sup> | *12.9* |
| **Portfolio expenditures** | **36 331** | **38 339** | **2 008** | ***5.5*** |  | **156 102** | ***1.8*** |  | **-** | **156 102** | ***3.2*** |
| **Debt service** | **2 755** | **2 582** | **-173** | ***-6.3*** |  | **9 670** | ***-1.9*** |  | **480** | **10 150** | ***1.8*** |
| **TOTAL** | **39 086** | **40 921** | **1 835** | ***4.7*** |  | **165 772** | ***1.5*** |  | **480** | **166 252** | ***3.1*** |

---

(1) The percentage change has been updated on the basis of the 2024-2025 results published in the *Public Accounts 2024-2025*.

(2) Other portfolios include $600 million for the reallocation of expenditure during the year.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 12 \| 23

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**► Budgetary outlook for 2025-2026**

Expenditure is forecast at $166.3 billion in 2025-2026 (annual growth of 3.1%). This represents an upward adjustment of $480 million from the 2025-2026 budget forecast.

▪ Portfolio expenditures remain unchanged and amount to $156.1 billion (annual growth of 3.2%, compared with growth of 1.8% forecast in the 2025-2026 budget).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Expenditures in the Éducation portfolio are adjusted upward by $250 million to fund the needs of school service centres and school boards. The $540-million reinvestment announced in the summer of 2025 is higher than the adjustment in expenditures for this portfolio for the fiscal year since the school year spans two fiscal years and part of the reinvestment comes from sums administered by the Ministère de l'Éducation, the disbursement of which has been accelerated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ This increase is offset by an equivalent central reallocation of expenditures during the year.

▪ Debt service is adjusted upward by $480 million to $10.2 billion, mainly due to higher-than-anticipated global interest rates at the beginning of the fiscal year and a lower-than-expected return on the Retirement Plans Sinking Fund (RPSF) in 2024-2025. The forecast annual variation is 1.8%. <br>

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 13 \| 23

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&nbsp;&nbsp;&nbsp;&nbsp; **Composition of portfolio expenditures**<br> Portfolio expenditures represent the total resources allocated to the delivery of public services. The government implements programs that are administered directly by government entities such as departments and organizations.<br> Programs and entities under a minister's responsibility constitute a portfolio. Portfolio expenditures are made up of:<br> program expenditures;<br> expenditures incurred notably by special funds, non-budget-funded bodies, as well as bodies in the health and social services, education and higher education networks;<br> tax-funded expenditures, which consist of refundable tax credits and the expenditure for doubtful accounts associated with tax revenues.<br> The composition and expenditure level of each portfolio vary according to the nature of the function and programs under the minister's responsibility. As a result, some portfolios will incur more expenses than others, depending on their mission.<br> In 2025-2026, there are 25 ministerial portfolios. For the first three months, the three main ones, Santé et Services sociaux, Éducation, and Enseignement supérieur, account for 67% of portfolio expenditures.<br>

&nbsp;&nbsp;&nbsp;&nbsp; **Composition of debt service**<br> Debt service represents the sum of interest on direct debt and interest on other employee future benefits liabilities in the public and parapublic sectors.<br> It depends in particular on the size of the debt and interest rates on financial markets. Each year, the government must devote a portion of its revenues to making interest payments.<br>

---

| |
|:---|
| **Expenditure as at June 30, 2025**<br> (billions of dollars and percentage of total expenditure) |
| ![](exhibit99-4x030.jpg) |

---

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 14 \| 23

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**Debt** <br>

As at March 31, 2026, net debt will stand at $255.3 billion, which is $0.3 billion more than forecast in the 2025-2026 budget, as a result of the upward adjustment to the debt level at the beginning of the fiscal year. The net debt burden will stand at 40.4% of GDP as at March 31, 2026, the same level as in the 2025-2026 budget. <br>

---

| | | | |
|:---|:---|:---|:---|
| **Net debt as at March 31, 2026** | **Net debt as at March 31, 2026** | **Net debt as at March 31, 2026** | **Net debt as at March 31, 2026** |
| (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) |
|  | **March 2025**<br>**budget** | **Adjustments** | **New**<br>**estimate** |
| **NET DEBT, BEGINNING OF YEAR** | **235 826** | **337<sup>(1)</sup>** | **236 163** |
| ***% OF GDP*** | ***38.7*** | **-** | ***38.7*** |
| Budgetary deficit (surplus) | 11 430 |  | 11 430 |
| Capital investments | 8 043 |  | 8 043 |
| Accounting adjustment | -296 |  | -296 |
| **Total change** | **19 177** | **-** | **19 177** |
| **NET DEBT, END OF YEAR** | **255 003** | **337** | **255 340** |
| ***% OF GDP*** | ***40.4*** | ***0.0*** | ***40.4*** |

---

(1) Despite a lower deficit, net debt as at March 31, 2025 is higher than forecast in the 2025-2026 budget mainly due to higher government capital investments and revaluation losses recognized on the government's derivative financial instruments, which are measured at fair value.

As at March 31, 2025, Québec's net debt burden stood at 38.7% of GDP, compared with the provincial average of 29.2%.<sup>6</sup> Excluding the least indebted province, Alberta, and the most indebted province, Newfoundland and Labrador, this average rose to 32.9%. <br>

**Net debt of governments in Canada as at March 31, 2025**<br> (percentage of GDP)<br>

![](exhibit99-4x033.jpg)<br>

(1) GDP weighted average.

(2) GDP weighted average excluding the least indebted province, Alberta, and the most indebted province, Newfoundland and Labrador.

Sources: Publics accounts and Government budget documents. <br>

6. Provincial average as at March 31, 2024 was 28.8%.<br>

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 15 \| 23

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**N** **et financial surpluses or requirements** <br>

For the period April to June 2025, net financial requirements amount to $9.6 billion and are attributable to:

▪ the $1.5-billion accounting deficit resulting from the difference between government revenue and expenditure;

▪ the $352-million financial requirements for investments, loans and advances, stemming in particular from an increase in the consolidation value of government enterprises;<sup>7</sup>

▪ the $827-million financial requirements related to government capital assets, mainly due to investments of $2.3 billion, notably for the refurbishment and construction of schools and healthcare facilities. These investments are partially offset by amortization expenses of $1.4 billion;<sup>7</sup>

▪ the $979-million financial requirements related to the liability for retirement plans and other future benefits, resulting from the payment of government employee benefits of $1.9 billion, offset by the net cost of the plans of $1.0 billion;<sup>7</sup>

▪ the $5.5-billion financial requirements from other accounts,<sup>8</sup> that stem in particular from disbursements relating to expenses recorded at the end of 2024-2025;

▪ the $497-million financial requirements generated by deposits in the Generations Fund. <br>

---

| | | |
|:---|:---|:---|
| **Net financial surpluses or requirements** | **Net financial surpluses or requirements** | **Net financial surpluses or requirements** |
| (unaudited data, millions of dollars) | (unaudited data, millions of dollars) | (unaudited data, millions of dollars) |
|  | **April to June** | **April to June** |
|  | **2024-2025** | **2025-2026** |
| **ACCOUNTING SURPLUS (DEFICIT)** | **-2 177** | **-1 460** |
| **Non-budgetary transactions** |  |  |
| Investments, loans and advances | -1 446 | -352 |
| Capital investments | -1 022 | -827 |
| Retirement plans and other employee future benefits | -801 | -979 |
| Other accounts<sup>(1)</sup> | -2 786 | -5 505 |
| Deposits in the Generations Fund | -469 | -497 |
| **Total non-budgetary transactions** | **-6 524** | **-8 160** |
| **NET FINANCIAL SURPLUSES (REQUIREMENTS)** | **-8 701** | **-9 620** |

---

(1) The financial surpluses or requirements pertaining to other accounts can vary significantly from one month to the next, in particular according to the time when the government collects or disburses funds related to its activities. For example, when the last day of the month is not a business day,QST remittances are collected at the beginning of the following month, such that the equivalent of two months' remittances can be collected in a given month.

7. These items, which are included in the government's budgetary surplus (deficit), are eliminated in non-budgetary transactions because they have no effect on cash flow.<br> 8. The financial surpluses or requirements pertaining to other accounts can vary significantly from one month to the next, in particular according to the time when the government collects or disburses funds related to its activities. For example, when the last day of the month is not a business day, QST remittances are collected at the beginning of the following month, such that the equivalent of two months' remittances can be collected in a given month.<br>

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 16 \| 23

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&nbsp;&nbsp;&nbsp;&nbsp; **Composition of net financial surpluses or requirements**<br> The government's revenues and expenditures are established on the accrual basis of accounting.<br> Revenues are recognized when earned and expenses when incurred, regardless of when receipts and disbursements occur. Net financial surpluses or requirements, on the other hand, consist of the difference between receipts and disbursements resulting from government activities. To meet its net financial requirements, the government uses a variety of financing sources, including cash and borrowings.<br> The various items for net financial requirements represent net receipts and disbursements generated by the government's loans, interests in its enterprises, and fixed assets, by retirement plans and other employee future benefits, as well as by other accounts.<br> This last item includes the payment of accounts payable and the collection of accounts receivable. Deposits in the Generations Fund also result in financial requirements.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 17 \| 23

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**F** **inancing program and borrowings** <br>

The financing program corresponds to long-term borrowings made during the fiscal year. It is used, among other things, to repay maturing borrowings and to meet net financial requirements. The latter notably include the budgetary deficit as well as government capital investments.

As at June 30, 2025, borrowings issued since April 1, 2025, amounted to $12.9 billion,<sup>9</sup> or 44% of the forecast program.

▪ Conventional bonds in Canadian dollars were the main borrowing instrument used.

▪ Borrowings on foreign markets accounted for 42% of borrowings issued in 2025-2026. <br>

---

| | | |
|:---|:---|:---|
| **Summary of long-term borrowings contracted in 2025-2026<sup>(1)</sup>** |  |  |
| **Currencies** | **$million** | **%** |
| **CANADIAN DOLLAR** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Conventional bonds | 7 302 | 56.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings products issued by Épargne Placements Québec | 174 | 1.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Immigrant investors<sup>(</sup><sup>2</sup><sup>)</sup> | 3 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Subtotal** | **7 479** | **57.8** |
| **OTHER CURRENCIES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Euro | 4 669 | 36.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Australian dollar | 798 | 6.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Subtotal** | **5 467** | **42.2** |
| **TOTAL** | **12 946** | **100.0** |

---

Note: Long-term borrowings issued between April 1, 2025 and June 30, 2025.<br>(1) An updated list of <u>new borrowings for the 2025-2026 fiscal year</u> is available.<br>(2) These borrowings come from sums advanced by immigrant investors. These sums are loaned to the government through Investissement Québec.

---

| | |
|:---|:---|
| **Summary of long-term borrowing repayments in 2025-2026** |  |
| **Currencies** | **$million** |
| **CANADIAN DOLLAR** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Conventional bonds | 652 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Subtotal** | **723** |
| **OTHER CURRENCIES** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Euro | 2 498 |
| &nbsp;&nbsp;&nbsp;&nbsp;Others |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Subtotal** | **2 498** |
| **TOTAL** | **3 221** |

---

Note: Long-term borrowing repayments from April 1, 2025 to June 30, 2025.

<br> 9. Long-term borrowings contracted between April 1, 2025 and June 30, 2025.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 18 \| 23

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**Appendix 1: Results and budgetary outlook for 2025-2026**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Results and budgetary outlook for 2025-2026 - Budgetary balance** | **Results and budgetary outlook for 2025-2026 - Budgetary balance** | **Results and budgetary outlook for 2025-2026 - Budgetary balance** | **Results and budgetary outlook for 2025-2026 - Budgetary balance** | **Results and budgetary outlook for 2025-2026 - Budgetary balance** | **Results and budgetary outlook for 2025-2026 - Budgetary balance** | **Results and budgetary outlook for 2025-2026 - Budgetary balance** | **Results and budgetary outlook for 2025-2026 - Budgetary balance** |
| (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) |
|  |  |  | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** |
|  | **April to**<br>**June** | **April to**<br>**June** | **March 2025**<br>**budget** | **March 2025**<br>**budget** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** |
|  | **Level**<br>**($M)** | ***Change*** <br>***(%)*** | **Level**<br>**($M)** | ***Change*** <br>***(%)*** | **Adjustment<br>($M)** | **Level**<br>**($M)** | ***Change*** <br>***(%)*** |
| **Revenue** |  |  |  | |  |  |  |
| Own-source revenue | 32 023 | *7.7* | 125 732 | *1.0* | 350 | 126 082 | *0.4* |
| Federal transfers | 7 438 | *3.8* | 30 610 | *-0.1* | 130 | 30 740 | *0.8* |
| **Subtotal - Revenue** | **39 461** | ***6.9*** | **156 342** | ***0.7*** | **480** | **156 822** | ***0.5*** |
| **Expenditure** |  | |  | |  |  |  |
| Portfolio expenditures | -38 339 | *5.5* | -156 102 | *1.8* |  | -156 102 | *3.2* |
| Debt service | -2 582 | *-6.3* | -9 670 | *-1.9* | -480 | -10 150 | *1.8* |
| **Subtotal - Expenditure** | **-40 921** | ***4.7*** | **-165 772** | ***1.5*** | **-480** | **-166 252** | **3.1** |
| Contingency reserve |  | *-* | -2 000 | *-* |  | -2 000 | *-* |
| **ACCOUNTING SURPLUS (DEFICIT)<sup>(2)</sup>** | **-1 460** | ***-*** | **-11 430** | ***-*** | **-** | **-11 430** | ***-*** |
| Deposits of dedicated revenues<br>in the Generations Fund | -497 | *-* | -2 177 | *-* |  | -2 177 | *-* |
| **BUDGETARY BALANCE<sup>(3)</sup>** | **-1 957** | ***-*** | **-13 607** | ***-*** | **-** | **-13 607** | ***-*** |

---

(1) The percentage change has been updated on the basis of the 2024-2025 results published in the *Public Accounts 2024-2025*.

(2) This is the operating surplus (deficit) as presented in the public accounts.

(3) Budgetary balance within the meaning of the *Balanced Budget Act*.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 19 \| 23

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**Appendix 1: Results and budgetary outlook for 2025-2026 (cont.)** <br>

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Results and budgetary outlook for 2025-2026 - Revenue** | **Results and budgetary outlook for 2025-2026 - Revenue** | **Results and budgetary outlook for 2025-2026 - Revenue** | **Results and budgetary outlook for 2025-2026 - Revenue** | **Results and budgetary outlook for 2025-2026 - Revenue** | **Results and budgetary outlook for 2025-2026 - Revenue** | **Results and budgetary outlook for 2025-2026 - Revenue** | **Results and budgetary outlook for 2025-2026 - Revenue** |
| (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) |
|  |  |  | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** |
|  | **April to**<br>**June** | **April to**<br>**June** | **March 2025**<br>**budget** | **March 2025**<br>**budget** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** |
|  | **Level**<br>**($M)** | ***Change*** <br>***(%)*** | **Level**<br>**($M)** | ***Change<br>(%)*** | **Adjustment<br>($M)** | **Level**<br>**($M)** | ***Change***<br>***(%)*** |
| **Own-source revenue** |  |  |  | |  |  |  |
| Income and property taxes |  | |  | |  |  |  |
| - Personal income tax | 12 079 | *8.9* | 46 944 | *3.3* | 110 | 47 054 | *3.0* |
| - Contributions for health services | 2 285 | *2.7* | 9 242 | *3.2* | -100 | 9 142 | *3.3* |
| - Corporate taxes | 3 249 | *21.0* | 12 491 | *-3.8* | 215 | 12 706 | *-4.8* |
| - School property tax | 304 | *4.5* | 1 346 | *14.1* |  | 1 346 | *12.5* |
| Consumption taxes | 7 830 | *7.0* | 28 922 | *3.4* | 50 | 28 972 | *2.1* |
| **Subtotal - Tax revenue** | **25 747** | ***9.0*** | **98 945** | ***2.5*** | **275** | **99 220** | ***1.8*** |
| Duties, permits and royalties | 1 550 | *-4.9* | 6 220 | *5.1* |  | 6 220 | *0.5* |
| Miscellaneous revenue | 3 800 | *5.9* | 15 299 | *-8.2* |  | 15 299 | *-5.9* |
| **Subtotal - Other own-source revenue** | **5 350** | ***2.5*** | **21 519** | ***-4.7*** | **-** | **21 519** | ***-4.1*** |
| **Total own-source revenue excluding revenue from government enterprises** | **31 097** | ***7.9*** | **120 464** | ***1.1*** | **275** | **120 739** | ***0.7*** |
| Revenue from government enterprises | 926 | *1.2* | 5 268 | *-2.6* | 75 | 5 343 | *-6.1* |
| **Total own-source revenue** | **32 023** | ***7.7*** | **125 732** | ***1.0*** | **350** | **126 082** | ***0.4*** |
| **Federal transfers** |  | |  | |  |  |  |
| Equalization | 3 392 | *1.9* | 13 567 | *1.9* |  | 13 567 | *1.9* |
| Health transfers | 2 235 | *5.4* | 8 942 | *6.1* | 66 | 9 008 | *6.8* |
| Transfers for post-secondary education and other social programs | 333 | *-1.5* | 1 330 | *-1.5* | 40 | 1 370 | *1.5* |
| Other programs | 1 478 | *7.3* | 6 771 | *-10.3* | 24 | 6 795 | *-8.2* |
| **Subtotal - Federal transfers** | **7 438** | ***3.8*** | **30 610** | ***-0.1*** | **130** | **30 740** | ***0.8*** |
| **TOTAL REVENUE** | **39 461** | ***6.9*** | **156 342** | ***0.7*** | **480** | **156 822** | ***0.5*** |

---

(1) The percentage change has been updated on the basis of the 2024-2025 results published in the *Public Accounts 2024-2025*.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 20 \| 23

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**A** **ppendix 1: Results and budgetary outlook for 2025-2026 (cont.)**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Results and budgetary outlook for 2025-2026 - Expenditure** | **Results and budgetary outlook for 2025-2026 - Expenditure** | **Results and budgetary outlook for 2025-2026 - Expenditure** | **Results and budgetary outlook for 2025-2026 - Expenditure** | **Results and budgetary outlook for 2025-2026 - Expenditure** | **Results and budgetary outlook for 2025-2026 - Expenditure** | **Results and budgetary outlook for 2025-2026 - Expenditure** | **Results and budgetary outlook for 2025-2026 - Expenditure** |
| (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) | (level and adjustment in millions of dollars, percentage change compared to the same period last year) |
|  |  |  | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** | **Forecast for fiscal 2025-2026** |
|  | **April to**<br>**June** | **April to**<br>**June** | **March 2025**<br>**budget** | **March 2025**<br>**budget** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** | **New**<br>**estimate<sup>(1)</sup>** |
|  | **Level**<br>**($M)** | ***Change***<br>***(%)*** | **Level**<br>**($M)** | ***Change<br>(%)*** | **Adjustment<br>($M)** | **Level**<br>**($M)** | ***Change***<br>***(%)*** |
| **Portfolio expenditures** |  |  |  | |  |  |  |
| Santé et Services sociaux | 16 292 | *3.8* | 65 527 | *3.0* |  | 65 527 | *2.1* |
| Éducation | 6 586 | *3.7* | 23 517 | *2.2* | 250 | 23 767 | *1.8* |
| Enseignement supérieur | 2 878 | *5.8* | 11 311 | *2.1* |  | 11 311 | *-0.6* |
| Famille | 2 391 | *17.3* | 9 308 | *7.2* |  | 9 308 | *3.3* |
| Transports et Mobilité durable | 2 032 | *27.0* | 7 308 | *-3.5* |  | 7 308 | *-4.9* |
| Emploi et Solidarité sociale | 1 517 | *3.2* | 5 804 | *0.1* |  | 5 804 | *1.7* |
| Affaires municipales et Habitation | 955 | *8.2* | 5 623 | *9.3* |  | 5 623 | *14.5* |
| Économie, Innovation et Énergie | 938 | *5.6* | 4 521 | *-6.9* |  | 4 521 | *-4.0* |
| Environnement, Lutte contre les changements climatiques, Faune et Parcs | 263 | *-25.9* | 2 436 | *0.0* |  | 2 436 | *11.7* |
| Other portfolios | 4 487 | *3.6* | 20 747<sup>(2)</sup> | *-2.2* | -250 | 20 497<sup>(2)</sup> | *12.9* |
| **Subtotal - Portfolio expenditures** | **38 339** | ***5.5*** | **156 102** | ***1.8*** | **-** | **156 102** | ***3.2*** |
| **Debt service** | **2 582** | *-***6.3** | **9 670** | ***-*****1.9** | **480** | **10 150** | **1.8** |
| **TOTAL EXPENDITURE** | **40 921** | ***4.7*** | **165 772** | ***1.5*** | **480** | **166 252** | ***3.1*** |

---

(1) The percentage change has been updated on the basis of the 2024-2025 results published in the *Public Accounts 2024-2025.*

(2) Other portfolios include $600 million for the reallocation of expenditure during the year.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 21 \| 23

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**Appendix 2: Change in certain economic variables**

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** | **Recent economic indicators in Québec** |
| (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) | (year-over-year percentage change, unless otherwise indicated) |
|  | **May**<br>**2025** | **June**<br>**2025** | **July**<br>**2025** | **Aug.**<br>**2025** | **Quarters of 2025** | **Quarters of 2025** | **Quarters of 2025** | **Quarters of 2025** | **2025** | **2025** |
|  | **May**<br>**2025** | **June**<br>**2025** | **July**<br>**2025** | **Aug.**<br>**2025** | **Q1** | **Q2** | **Q3** | **Q4** | **Fcst.<sup>(1)</sup>** | **Obs.<sup>(2)</sup>** |
| Real GDP by industry | -0.4 | -0.1 |  |  | 0.3 | -0.6 |  |  | 1.1 | 1.2 |
| Job creation (thousands) | -17 | 23.4 | -15 | 7.5 | 27.2 | 10.4 |  |  | 39.1 | 92 |
| Unemployment rate (per cent) | 5.8 | 6.3 | 5.5 | 6 | 5.5 | 6 |  |  | 5.8 | 5.8 |
| Retail sales (nominal terms) | -0.5 | 0 | 0.2 |  | -0.8 | 0.7 |  |  | 3.1 | 3.8 |
| Consumer price index<sup>(3)</sup> | 1.7 | 2.2 | 2.3 | 2.7 | 1.9 | 2 |  |  | 2.1 | 2.1 |
| Housing starts (thousands) | 67.5 | 58.8 | 63.8 | 58.5 | 56.8 | 61.2 |  |  | 50.5 | 59.5 |
| Real GDP |  |  |  |  | 0.4 | -0.6 |  |  | 1.1 | 1.2 |
| GDP (nominal terms) |  |  |  |  | 1 | -0.1 |  |  | 3.4 | 5.3 |
| Household consumption (nominal terms) |  |  |  |  | 0.5 | 1.5 |  |  | 4.6 | 6.3 |
| Wages and salaries (nominal terms) | 0 | -0.7 |  |  | 1.1 | -0.6 |  |  | 3.7 | 5.3 |
| Net operating surplus of corporations (nominal terms) |  |  |  |  | 1.6 | -0.7 |  |  | -1.1 | 2.9 |

---

(1) These forecasts correspond to those published in the 2025-2026 budget.

(2) Cumulative of available periods compared to the same period of the previous year.

(3) Change compared to the previous year.<br>Sources: Institut de la statistique du Québec, Statistics Canada and Canada Mortgage and Housing Corporation.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 22 \| 23

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**► Note to the reader**

The *Report on Québec's Financial Situation* provides an overview of the Québec government's financial results. It is prepared with a view to increasing the transparency of public finances and regularly monitoring the achievement of the budgetary balance target for the fiscal year. The financial information presented in the report is not audited and is based on the accounting policies in the government's annual financial statements.

**► Consolidated financial information**

Consolidated results include the results of all entities that are part of the government's reporting entity, i.e., that are under its control. To determine consolidated results, the government eliminates transactions carried out between entities in the reporting entity. Additional information on the government's financial organization and the funding of public services can be found on pages 14 to 19 of the document titled *"*<u>*Processus et documentation budgétaires : une reddition de comptes sur les finances publiques de l'État*</u>" (in French only). 

**► Publication date of next quarterly report**

The Report on Québec's Financial Situation - Second Quarter of 2025-2026 will be published in December 2025.

For more information, contact the Direction des<br>communications of the Ministère des Finances at<br><u>info@finances.gouv.qc.ca</u>. The report is available on the Ministère des <br>Finances website at <u>www.finances.gouv.qc.ca</u>.

Report on Québec's Financial<br>Situation - First Quarter of 2025-2026 Page 23 \| 23

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