# EDGAR Filing Document

**Accession Number:** 0000722803
**File Stem:** 0001062993-26-001573
**Filing Date:** 2026-3
**Character Count:** 442154
**Document Hash:** a0f015328c90e9b4166cf4e1e34cb56e
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## Filing Content

## Filing Summary
**0001062993-26-001573.hdr.sgml**: 20260323

**ACCESSION NUMBER**: 0001062993-26-001573

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

**PUBLIC DOCUMENT COUNT**: 125

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20260323

**DATE AS OF CHANGE**: 20260323

**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:** 26780211

**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. 10**

**to**

**ANNUAL REPORT**

of

**QUÉBEC**

(Name of Registrant)

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

**SECURITIES REGISTERED\***

**(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 |

---

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>New York, N.Y. 10020-2102

Copies to:

---

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

---

\* 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:

<u>Exhibits:</u>

---

| | |
|:---|:---|
| [(99.11)](exhibit99-11.htm) | [Section A - "Overview" from "Budget 2026-2027 - A responsible budget with targeted measures for Quebecers - March 2026", March 18, 2026.](exhibit99-11.htm) |
| [(99.12)](exhibit99-12.htm) | [Section E "The Québec Economy: Recent Developments and Outlook for 2026 and 2027: from "Budget 2026-2027 - A responsible budget with targeted measures for Quebecers - March 2026", March 18, 2026.](exhibit99-12.htm) |
| [(99.13)](exhibit99-13.htm) | [Section F - "Québec's Financial Situation" from "Budget 2026-2027 - A responsible budget with targeted measures for Quebecers - March 2026", March 18, 2026.](exhibit99-13.htm) |
| [(99.14)](exhibit99-14.htm) | [Section G - "The Québec Government's Debt" from "Budget 2026-2027 - A responsible budget with targeted measures for Quebecers - March 2026", March 18, 2026.](exhibit99-14.htm) |
| [(99.15)](exhibit99-15.htm) | [Excerpts from "Budget Speech 2026-2027", March 18, 2026:](exhibit99-15.htm) |
|  | – Québec government - Summary of budgetary transactions - Preliminary results for 2025-2026 (table 1); |
|  | – Québec government - Summary of budgetary transactions - Forecasts for 2026-2027 (table 2); |
|  | – Québec government - Revenue - Forecasts for 2026-2027 (table 3); |
|  | – Québec government - Expenditure - Forecasts for 2026-2027 (table 4). |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment no. 10 to be signed on its behalf by its authorized agent.

---

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

---

Date: March 23, 2026

------

## Exhibit 99.11

------

Exhibit 99.11

Section A

**OVERVIEW**

---

| | |
|:---|:---|
| [**Summary**](#page_2) | [**A.3**](#page_2) |
| [**1. Accelerating Québec's economic transformation**](#page_11) | [**A.13**](#page_11) |
| [**2. Supporting the government's main missions**](#page_12) | [**A.15**](#page_12) |
| [**3. Supporting Quebecers and communities with targeted action**](#page_13) | [**A.17**](#page_13) |
| [**4. Québec's economy**](#page_15) | [**A.19**](#page_15) |
| [**5. Québec's financial situation**](#page_20) | [**A.25**](#page_20) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[5.1 Stimulating the economy through significant public infrastructure investments](#page_26) | [A.31](#page_26) |
| [**6. The Québec government's debt**](#page_28) | [**A.33**](#page_28) |
| [**APPENDIX: Québec's economic outlook - 2024 to 2030**](#page_30) | [**A.35**](#page_30) |

---

A.1

------

![](exhibit99-11xu001.jpg)

**SUMMARY**

Since the pandemic, Québec has faced an economic and geopolitical context marked by persistent uncertainty. With significant geopolitical tensions, fluctuating trade and tariff policies along with the fragmentation of trade, the global landscape is affecting the public finances of several major economies worldwide, particularly open economies like Québec's.

In this environment, the government has had to strike a delicate balance between making the necessary investments to strengthen public services, stimulate the economy, protect Quebecers' purchasing power, look after the well-being of the most vulnerable populations and support businesses heavily affected by tariffs while maintaining the sound management of public finances. The government has approached this challenge responsibly.

❏ **A responsible budget with targeted measures for Quebecers**

In a climate of ongoing uncertainty, the government is supporting businesses operating in a shifting economic landscape, investing in infrastructure, prioritizing the government's main missions and supporting Quebecers and communities with targeted action.

&nbsp;&nbsp;&nbsp;&nbsp; **In Budget 2026-2027, the government is allocating nearly $9.6 billion over six years to support businesses, the government's main missions and Quebecers.**<br> **The government is also increasing investment in infrastructure by more than $5 billion over six years.**<br>

In Budget 2026-2027, the government is carrying on its actions:

- it is accelerating Québec's economic transformation;

- it is investing in infrastructure to strategically support the Québec economy;

- it is prioritizing funding for the government's main missions to guarantee Quebecers accessible, high-quality services;

- it is taking targeted action to support Quebecers and communities.

<br> Overview A.3

------

TABLE A.1

**Financial impact of the measures in Budget 2026-2027**<br> (millions of dollars)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **Total** |
| &nbsp;&nbsp;Accelerating Québec's economic transformation |  | -480.3 | -507.4 | -360.7 | -204.7 | -150.4 | -1 703.5 |
| &nbsp;&nbsp;Supporting the government's main missions |  | -910.0 | -928.3 | -851.0 | -794.7 | -791.4 | -4 275.4 |
| &nbsp;&nbsp;Supporting Quebecers <br>and communities with targeted action | -37.0 | -742.3 | -1 129.6 | -724.1 | -503.6 | -478.6 | -3 615.2 |
| &nbsp;&nbsp;**TOTAL** | -**37.0** | -**2 132.6** | -**2 565.3** | -**1 935.8** | -**1 503.0** | -**1 420.4** | -**9 594.1** |

---

Note: Totals may not add due to rounding.

Lastly, the government is reaffirming its commitment to the responsible management of public finances, having seen compelling results. After a downward adjustment in 2024-2025, the accounting deficits projected for 2025-2026 and 2026-2027 are reduced by nearly $3.8 billion and $861 million, respectively. For the following years, the gaps to be bridged are reduced. Québec's net debt burden is also adjusted downward compared to Budget 2025-2026 for each year of the financial framework. The government is resolutely pursuing its path toward a balanced budget, and it intends to do this by 2029-2030.

❏ **Québec's economic situation**

The global economy is in a period of profound transformation. After several decades of growth fuelled by globalization and free trade, a new context characterized by rising protectionism and heightened geopolitical tensions is emerging, disrupting supply chains and creating a climate of uncertainty that is weighing on investment and international trade.

Meanwhile, accelerated investment in artificial intelligence (AI) is supporting productivity gains. This dynamic is encouraging the emergence of new innovation hubs and reshaping global competition. Still, enthusiasm surrounding AI in financial markets raises the risk that these markets may overestimate the speed and scale of expected economic benefits.

Budget 2026-2027 <br> A.4 Budget Plan

------

![](exhibit99-11xu001.jpg)

Québec is nevertheless well positioned to deal with this new situation. Since 2018, Québec has outperformed the rest of Canada. The significant initiatives implemented by the Québec government to increase the potential of the economy have led to the creation of more wealth.[<sup>1</sup>](#_ftn1)

- According to the most recent official statistics available, between 2018 and 2024, the standard of living, measured by real GDP per capita, increased by 4.9% in Québec. For the same period, it fell by 0.3% in Ontario and 0.9% in the rest of Canada.

&nbsp;&nbsp;&nbsp;&nbsp; **Québec's standard of living gap with Ontario narrowed from 15.9% in 2018 to a low of 10.2% in 2024. After reaching 20.2% in 2018, the standard of living gap with the rest of Canada stood at 13.6% in 2024.**<br> – **Such small gaps have never been observed since statistics began to be compiled in 1981.**<br>

- At the same time, the Québec government has continued to protect its citizens' wallets, thereby strengthening the financial position of Québec households.

- Between 2018 and 2024, household purchasing power, as measured by real disposable income per capita, improved by 9.2% in Québec, compared to 5.1% in Ontario and the rest of Canada.

Québec's economy has better withstood various headwinds and is gradually adapting to the new trade reality. There is still uncertainty around trade tensions and the review of the Canada-United States-Mexico Agreement (CUSMA), but it is expected to gradually subside. Nevertheless, population aging, in combination with adjustments in temporary and permanent immigration, will limit economic growth in the coming years.

- Following a 0.8% increase in 2025, real GDP growth is expected to hold strong and reach 1.1% in 2026 and 1.4% in 2027.

Budget 2026-2027 is based on the premise that the average effective tariff rate will remain relatively stable over the next few years and that current tariffs will become permanent. It also takes into account the recent rises in oil prices, but assumes that the situation will be temporary and will ease in the coming months.

------

[<sup>1</sup>](#_ftnref1) Unless otherwise indicated, this document reflects economic data available as at March 6, 2026.

<br> Overview A.5

------

❏ **Accelerating Québec's economic transformation**

In Budget 2026-2027, the government is planning initiatives totalling more than $1.7 billion over five years to accelerate Québec's economic transformation.

- Of this amount, the government is investing nearly $700 million to promote the implementation of investment projects in promising sectors and improve the competitiveness of Québec businesses through innovation.

- It is taking action to benefit SMBs in all regions of Québec, providing them with over $580 million in support. In particular, it intends to fund promising regional economic development initiatives, foster the development of the tourism and agri-food sectors as well as support forestry businesses and communities.

- Lastly, the government is setting aside nearly $430 million to address challenges in the audiovisual sector, ensure the sustainability of Québec's media ecosystem and promote Québec cultural content.

The government is also granting itself an additional intervention capacity that can reach $2 billion, through its investment funds, to maintain head offices in Québec and develop the critical and strategic minerals sector.

❏ **Boosting investment in infrastructure**

The government is increasing investment in infrastructure by more than $5 billion over six years in order to invest more in maintaining assets across the province and providing Québec with modern infrastructure. The 2026-2036 Québec Infrastructure Plan (QIP) will total $167 billion.

- These new amounts will be distributed among priority sectors: health and social services, education and higher education, public transit, the road network and the continued digital transformation of public bodies.[<sup>2</sup>](#_ftn2)

- A significant portion, that is, 71%, of the amounts invested will be allocated to maintaining existing infrastructure. Compared to the previous QIP, this is a significant increase, as the previous figure stood at 65%.

------

[<sup>2</sup>](#_ftnref2) The 2026-2036 QIP published by the Secrétariat du Conseil du trésor provides detailed information on planned investments by sector.

Budget 2026-2027 <br> A.6 Budget Plan

------

![](exhibit99-11xu001.jpg)

❏ **Supporting the government's main missions**

In Budget 2026-2027, the government is setting aside nearly $4.3 billion to support its main missions.

- Nearly $2.2 billion will help facilitate access to health care and social services, in particular by supporting access to medications, continuing efforts to reduce surgery wait lists, strengthening front-line access, and supporting initiatives for caregivers.

- Nearly $640 million will be used to support students' educational success, meet urgent and temporary school space needs and make the education network more attractive to workers.

- The government is also setting aside nearly $400 million to support higher education training, labour market integration and research, particularly to continue promoting and raising the profile of engineering and information technology, extend employment assistance allowances and support research bodies.

- Furthermore, the government is setting aside more than $1 billion to strengthen Quebecers' safety and access to legal services, particularly by consolidating prevention and intervention activities in the area of public safety, and continuing efforts to combat armed violence.

❏ **Supporting Quebecers and communities with targeted action**

In Budget 2026-2027, the government is investing more than $3.6 billion to ensure the well-being of Quebecers and strengthen the vitality of communities across Québec.

- Of this amount, nearly $2.4 billion will be used to support Quebecers, particularly in helping them cope with the rising cost of living. This amount will serve to convert 5 000 non-subsidized childcare spaces, support access to housing, address social issues such as homelessness, mental health, domestic and sexual violence, as well as to reinforce services for the most vulnerable populations, in particular by renewing funding for several community organizations, such as Food Banks of Québec.

- In addition, an investment of over $1 billion is planned to ensure community resilience, particularly with regard to local infrastructure and for adapting to and fighting climate change.

- Lastly, the government is allocating nearly $220 million to promote Québec culture and cultural heritage.

<br> Overview A.7

------

❏ **Maintaining sound management of public finances**

Through responsible expenditure management and stronger-than-expected nominal GDP growth in 2025, this budget presents a budgetary situation that is proving to be better than that forecast in March 2025.

On a comparable basis to the budgetary balances of other Canadian provinces and the federal government, the accounting deficit has been adjusted downward by nearly $3.8 billion in 2025-2026, bringing it to $7.7 billion, or 1.2% of GDP.[<sup>3</sup>](#_ftn3)

- In 2025-2026, Québec has one of the lowest deficits among Canadian provinces, whose average stands at 1.7% of GDP.

- As a percentage of GDP, this is one of the lowest deficits, after Saskatchewan (0.4% of GDP), Alberta (0.9% of GDP) and Ontario (1.1% of GDP).

- In 2026-2027, the accounting balance shows a deficit of $6.3 billion, or 0.9% of GDP, representing an improvement of $861 million compared to that forecast in Budget 2025-2026.

&nbsp;&nbsp;&nbsp;&nbsp; **The government is taking another step toward achieving a balanced budget by reducing the deficits projected for 2025-2026 and 2026-2027 and the gaps to be bridged for subsequent years.**<br> **Québec's net debt burden is also adjusted downward compared to Budget 2025-2026 for each year of the financial framework.**<br>

------

[<sup>3</sup>](#_ftnref3) Unless otherwise indicated, this document is based on budgetary data available as at March 6, 2026. The data presented for 2025-2026 are preliminary results. The data for 2026-2027 to 2030-2031 are forecasts and those for subsequent years are projections.

Budget 2026-2027 <br> A.8 Budget Plan

------

![](exhibit99-11xu001.jpg)

Given the economic environment, the government is maintaining an $8-billion contingency reserve over the period covered by the financial framework, including $2 billion in 2026-2027. This reserve could be used, in particular, to cover unforeseen expenditures or mitigate the effects of more-moderate-than-expected economic growth.

TABLE A.2

**Québec's economic and financial outlook**<br> (billions of dollars, unless otherwise indicated)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2024-<br>2025** | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** |
| &nbsp;&nbsp;**FINANCIAL SITUATION** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Revenue | 156.1 | 160.5 | 166.5 | 172.8 | 177.6 | 181.8 | 188.2 |
| &nbsp;&nbsp;Expenditure | -161.3 | -168.2 | -170.8 | -175.2 | -177.2 | -179.5 | -185.5 |
| &nbsp;&nbsp;Contingency reserve |  |  | -2.0 | -1.5 | -1.5 | -1.5 | -1.5 |
| &nbsp;&nbsp;**Accounting surplus (deficit)** | **-5.2** | **-7.7** | **-6.3** | **-4.0** | **-1.1** | **0.8** | **1.2** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***0.8*** | ***1.2*** | ***0.9*** | ***0.6*** | ***0.2*** | ***0.1*** | ***0.2*** |
| &nbsp;&nbsp;**DEBT** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Net debt | 236.2 | 250.3 | 259.5 | 271.1 | 276.8 | 279.3 | 281.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *38.3* | *38.8* | *38.9* | *39.3* | *38.8* | *37.9* | *36.9* |
|  | **2024** | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** |
| &nbsp;&nbsp;**ECONOMIC INDICATORS** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Real GDP (% change) | 1.7 | 0.8 | 1.1 | 1.4 | 1.5 | 1.5 | 1.4 |
| &nbsp;&nbsp;Nominal GDP (% change) | 5.9 | 4.5 | 3.5 | 3.4 | 3.4 | 3.4 | 3.3 |

---

Note: Totals may not add due to rounding.

<br> Overview A.9

------

Despite the backdrop of a pandemic, heightened geopolitical tensions caused, among other things, by Russia's invasion of Ukraine and a trade dispute with the United States, Québec has continued its efforts to reduce its debt load.

However, both in Canada and internationally, governments have generally seen their indebtedness rise in recent years.

&nbsp;&nbsp;&nbsp;&nbsp; **As at March 31, 2026, Québec's net debt will represent 38.8% of GDP, a steep drop of 4.1 percentage points from the level of 42.9% as at March 31, 2019.**<br>

- Québec, along with Ontario and New Brunswick, is one of the only provinces to have reduced its indebtedness during this period.

The government remains committed to reducing the debt burden in the long term and is maintaining deposits of dedicated revenues in the Generations Fund. It will meet the net debt reduction targets set at 35.5% of GDP by 2032-2033 and 32.5% of GDP by 2037-2038.

CHART A.1

**Net debt as at March 31**<br> (percentage of GDP)

![](exhibit99-11xu002.jpg)

Note: As of April 1, 2026, the concept of net debt will be replaced by that of net financial liabilities due to the new accounting standard on financial statement presentation coming into force. <br>

Budget 2026-2027 <br> A.10 Budget Plan

------

![](exhibit99-11xu001.jpg)

❏ **Returning to a balanced budget**

In Budget 2025-2026, the government presented the plan to restore fiscal balance by 2029-2030. This budget confirms that the established trajectory is being respected. The plan is credible and based on measures for revenue and expenditure.

- The budgetary balance according to the *Balanced Budget Act*, that is, after deposits in the Generations Fund, shows a deficit of $9.9 billion in 2025-2026, or 1.5% of GDP, and $8.6 billion in 2026-2027, or 1.3% of GDP.

The more favourable-than-expected budgetary forecasts will make it possible to reduce the gap to be bridged by $250 million in 2027-2028 and in 2028-2029, $500 million in 2029-2030 and $750 million in 2030-2031.

- Once the uncertainty, mainly related to the CUSMA review, dissipates, the economic situation should recover and allow for the gaps to be bridged.

As a result, in accordance with the *Balanced Budget Act*, a balanced budget, after deposits of dedicated revenues in the Generations Fund, will be achieved by 2029-2030 at the latest.

TABLE A.3

**Budgetary balance within the meaning of the** ***Balanced Budget Act***<br> (millions of dollars, unless otherwise indicated)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** |
| &nbsp;&nbsp;**ACCOUNTING SURPLUS (DEFICIT)** | **-7 655** | **-6 265** | **-3 954** | **-1 134** | **780** | **1 168** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.2*** | ***0.9*** | ***0.6*** | ***0.2*** | ***0.1*** | ***0.2*** |
| &nbsp;&nbsp;Gap to be bridged |  |  | 750 | 2 250 | 2 000 | 1 750 |
| &nbsp;&nbsp;Deposits of dedicated revenues<br>in the Generations Fund | -2 289 | -2 347 | -2 491 | -2 616 | -2 780 | -2 918 |
| &nbsp;&nbsp;**BUDGETARY BALANCE WITHIN THE MEANING OF** <br>**THE** ***BALANCED BUDGET ACT*** | **-9 944** | **-8 612** | **-5 695** | **-1 500** | **-** | **-** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.5*** | ***1.3*** | ***0.8*** | ***0.2*** | ***0.0*** | ***0.0*** |

---

Note: Totals may not add due to rounding.

<br> Overview A.11

------

![](exhibit99-11xu001.jpg)

**1. ACCELERATING QUÉBEC'S ECONOMIC TRANSFORMATION**

Québec has many assets to help them meet this challenge, including a business climate conducive to investment and innovation, a diversified economy and abundant natural resources.

In Budget 2026-2027, the government is planning initiatives totalling more than $1.7 billion over five years to accelerate Québec's economic transformation:

- nearly $700 million to support businesses in adapting to the new economic climate by ensuring a competitive business environment conducive to the implementation of investment projects in promising sectors, as well as an attractive and high-performing ecosystem by supporting investment in research and innovation;

- more than $580 million to take action to benefit SMBs in all regions by contributing to regional economic growth, accelerating the development of the tourism sector, fostering the development of the bio-food sector, and supporting forestry businesses and communities;

- nearly $430 million to support the growth of our cultural sector by addressing challenges in the audiovisual sector, ensuring the sustainability of Québec's media ecosystem, and promoting Québec cultural content.

Furthermore, the government is granting itself an additional intervention capacity that can reach $2.0 billion, through its investment funds, to maintain head offices in Québec and develop the critical and strategic minerals sector.

TABLE A.4

**Financial impact of the measures to accelerate Québec's<br>economic transformation**

(millions of dollars)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **Total** |
| &nbsp;&nbsp;Supporting businesses in adapting to the new economic climate | -103.0 | -250.1 | -179.4 | -107.2 | -53.4 | -693.1 |
| &nbsp;&nbsp;Taking action to benefit SMBs in all regions | -293.3 | -165.1 | -72.1 | -25.0 | -25.8 | -581.3 |
| &nbsp;&nbsp;Supporting the growth of our cultural sector | -84.0 | -92.2 | -109.2 | -72.5 | -71.2 | -429.1 |
| &nbsp;&nbsp;**TOTAL** | **-480.3** | **-507.4** | **-360.7** | **-204.7** | **-150.4** | **-1 703.5** |

---

<br> Overview A.13

------

![](exhibit99-11xu001.jpg)

**2. SUPPORTING THE GOVERNMENT'S MAIN MISSIONS**

In recent years, the government has invested in supporting its main missions, namely the provision of health care and social services, education and higher education, and public safety and justice. These significant investments have provided the basic funding needed to meet the growing needs of the population, improve the accessibility and quality of services offered to citizens, ensure the continuation of essential programs, and thus support the long-term viability of public services.

Budget 2026-2027 is setting aside nearly $4.3 billion over five years to support the government's main missions:

- nearly $2.2 billion to improve access to health care and social services, including supporting access to medications, continuing efforts to reduce surgery wait lists, strengthening front-line access, and supporting initiatives for caregivers;

- nearly $640 million to support students' educational success, meet urgent and temporary school space needs and make the education network more attractive to workers;

- nearly $400 million to support higher education training, labour market integration and research, particularly to continue promoting and raising the profile of engineering and information technology, extend employment assistance allowances and support research bodies;

- more than $1 billion to strengthen Quebecers' safety and access to legal services, particularly by consolidating prevention and intervention activities in the area of public safety, and continuing efforts to combat armed violence.

TABLE A.5

**Financial impact of the measures to support the government's main missions**<br> (millions of dollars)****

<br> ---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **Total** |
| &nbsp;&nbsp;Facilitating access to health care and social services | -397.6 | -447.2 | -447.5 | -437.9 | -438.3 | -2 168.5 |
| &nbsp;&nbsp;Supporting educational success | -164.7 | -135.3 | -113.0 | -113.0 | -113.0 | -639.0 |
| &nbsp;&nbsp;Supporting higher education training, labour market integration and research | -108.3 | -108.4 | -78.1 | -50.4 | -46.7 | -391.9 |
| &nbsp;&nbsp;Strengthening Quebecers' safety and access to <br>legal services | -239.4 | -237.4 | -212.4 | -193.4 | -193.4 | -1 076.0 |
| &nbsp;&nbsp;**TOTAL** | **-910.0** | **-928.3** | **-851.0** | **-794.7** | **-791.4** | **-4 275.4** |

---

<br> Overview A.15

------

![](exhibit99-11xu001.jpg)

**3. SUPPORTING QUEBECERS AND COMMUNITIES WITH TARGETED ACTION**

The uncertain socioeconomic context affects all Quebecers and exacerbates the difficult situations many of them are experiencing.

The government therefore intends to continue its efforts to support Quebecers and communities who are faced with growing challenges. It is maintaining investments and initiatives that address priority needs and protect the most vulnerable citizens.

In Budget 2026-2027, the government is allocating more than $3.6 billion over six years to support Quebecers and communities:

- nearly $2.4 billion over five years to support Quebecers, in particular by helping families cope with the rising cost of living by converting 5 000 non-subsidized childcare spaces and maintaining the school tax growth cap at 3%,[<sup>4</sup>](#_ftn4) supporting access to housing, addressing homelessness and mental health issues, combatting domestic and sexual violence, and strengthening services for vulnerable individuals;

&nbsp;&nbsp;&nbsp;&nbsp; **Ultimately, the government's actions since 2021 will have led to the creation of nearly 46 000 additional subsidized childcare spaces for families.** <br> **This number is in addition to the nearly 16 000 non-subsidized childcare spaces to be converted.**<br>

- more than $1.0 billion over six years to ensure community resilience, in particular by strengthening the vitality of the territory and providing households with additional support to adapt to and fight climate change;

- nearly $220 million over five years to promote Québec culture and cultural heritage, in particular by maintaining funding for cultural activities in schools, supporting cultural bodies and preserving our cultural heritage.

------

[<sup>4</sup>](#_ftnref4) The choices the government has made since 2018 have helped return money to Quebecers. For example, in 2026-2027, the government will return more than $7 billion to Quebecers. Details of these initiatives are presented on page 33 of Section D, "Supporting Quebecers and Communities with Targeted Action."

<br> Overview A.17

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![](exhibit99-11xu001.jpg)

TABLE A.6

**Financial impact of the measures to support Quebecers and communities<br>with targeted action**<br> (millions of dollars)****

<br> ---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **Total** |
| &nbsp;&nbsp;Supporting Quebecers |  | -579.1 | -679.7 | -505.9 | -300.3 | -303.9 | -2 368.9 |
| &nbsp;&nbsp;Ensuring community resilience<sup>(1)</sup> | -37.0 | -130.9 | -397.2 | -164.6 | -165.0 | -134.5 | -1 029.2 |
| &nbsp;&nbsp;Promoting Québec culture and cultural heritage |  | -32.3 | -52.7 | -53.6 | -38.3 | -40.2 | -217.1 |
| &nbsp;&nbsp;**TOTAL** | **-37.0** | **-742.3** | **-1 129.6** | **-724.1** | **-503.6** | **-478.6** | **-3 615.2** |

---

(1) Of these amounts, $583.9 million will be drawn from the Electrification and Climate Change Fund. <br>

Budget 2026-2027 <br> A.18 Budget Plan

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![](exhibit99-11xu001.jpg)

**4. QUÉBEC'S ECONOMY**

The global context is profoundly marked by geopolitical, economic and technological upheavals. Québec is navigating this turbulent period and is well positioned to meet the challenges and seize new opportunities. The major initiatives implemented by the government to increase the economy's potential have created more wealth.

Since 2018, Québec has outperformed the rest of Canada.

- Québec's strong economic performance has helped narrow the gap in living standards, as defined by real GDP per capita, with its key partners.

- Meanwhile, several measures put in place by the government have supported the purchasing power of households, thereby strengthening their financial situation.

&nbsp;&nbsp;&nbsp;&nbsp; **Between 2018 and 2024, household purchasing power, as measured by real disposable income per capita, improved by 9.2% in Québec, compared to 5.1% in Ontario and the rest of Canada.**<br>

---

| | |
|:---|:---|
| CHART A.2 | CHART A.3 |
| **Non-residential business investment and standard of living - 2018-2024** | **Average weekly earnings and household purchasing power - 2018-2024** |
| (percentage change over the entire period) | (percentage change over the entire period) |
| ![](exhibit99-11xu003.jpg) | ![](exhibit99-11xu004.jpg) |
|  Note: Investments per capita are expressed in real terms and standard of living as measured by real GDP per capita.<br> Sources: Statistics Canada and Ministère des Finances du Québec. | Note: Average weekly earning is expressed in nominal terms, and purchasing power represents real household disposable income per capita.<br> Sources: Statistics Canada and Ministère des Finances du Québec. |

---

<br> Overview A.19

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![](exhibit99-11xu001.jpg)

- The Québec labour market is among the best performing in Canada. In 2025, only Saskatchewan (5.2%) had a lower unemployment rate than Québec (5.6%) among all provinces (6.8% in Canada). The employment rate for people aged 15 to 64 (77.4%) was the highest in the country (74.2%).

- Furthermore, Québec's housing market remains one of the country's most dynamic, supported by more flexible financing conditions and greater affordability than elsewhere in Canada.

- The Canadian dollar, which remains at a relatively low level, supports the competitiveness of exports. In addition, Québec exporters have adopted a number of strategies to mitigate the impact of tariffs, including diversifying their export markets.

CHART A.4

**Housing starts and transactions on the resale market**

(percentage change)

![](exhibit99-11xu005.jpg)

Sources: Canada Mortgage and Housing Corporation, Canadian Real Estate Association, Centris and Haver Analytics.

❏ **The economy is adapting to the new trade reality**

Even in the face of numerous headwinds, Québec's economy showed resilience in 2025. It gradually adapted to the new trade reality, but real GDP growth slowed (+0.8%).

- Despite the tariffs imposed, most exports were shielded under the Canada-United States-Mexico Agreement (CUSMA). Meanwhile, Bank of Canada policy rate cuts, support measures granted by the various levels of government, and the healthy financial position of households helped bolster consumer spending and the residential sector.

Budget 2026-2027 <br> A.20 Budget Plan

------

![](exhibit99-11xu001.jpg)

In 2026 and 2027, Québec's economy is expected to withstand persistent trade disruptions, and real GDP growth should accelerate. Nonetheless, uncertainty will remain.

- Among other things, the U.S. administration is maintaining high tariffs on certain Canadian products, including aluminum and softwood lumber, and is suggesting that it could introduce more. Furthermore, the effective tariff rate remains low, but CUSMA will be reviewed in 2026 and the outcome of the negotiations is uncertain.

- The geopolitical situation remains tense, particularly in the Middle East.

- In addition, population aging and the decline in temporary and permanent immigration will limit economic gains in the coming years.

In its baseline economic scenario, the Ministère des Finances assumes that trade relations between Canada and the United States will evolve toward a new equilibrium, marked by persistent tariff measures. This scenario takes into account the recent rises in oil prices, but assumes that the situation will be temporary and will ease in the coming months.

- Budget 2026-2027 is based on the premise that the average effective tariff rate will remain relatively stable over the next few years. Furthermore, the review of CUSMA in July 2026 could lead to reduced uncertainty.

---

| |
|:---|
| &nbsp;&nbsp; **An economic forecast in an environment of great uncertainty** |
| &nbsp;&nbsp; Developments in the trade dispute with the United States, the Canada-United States-Mexico Agreement (CUSMA) review process, and the situation in the Middle East are the main risks to the baseline economic scenario. In this context, the Ministère des Finances is presenting two alternative economic forecasts in Section H of the *Québec Budget Plan - March 2026*.<br> - In particular, an increase in tariffs, the application of further sectoral tariffs or a possible withdrawal of the United States from CUSMA could exacerbate supply chain disruptions and cause a sharper slowdown in international trade, thus dampening economic growth, particularly in investment and exports. Furthermore, the tense geopolitical situation in several regions of the world, including the Middle East, could also slow down the economy, due in particular to an oil shock, if it lasted longer than anticipated.<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ This scenario would result in a recession. Economic activity in Québec would then decline by 0.2% in 2026, before growing by 0.8% in 2027.<br> - Conversely, if a trade agreement were to be reached between Canada and the United States or certain sectoral tariffs were to be withdrawn, this would reduce uncertainty and stimulate economic growth.<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ Real GDP would increase by 1.6% in 2026, 2.0% in 2027 and 1.8% in 2028. |

---

<br> Overview A.21

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![](exhibit99-11xu001.jpg)

Overall, following a 0.8% increase in 2025, real GDP growth is expected to accelerate and reach 1.1% in 2026 and 1.4% in 2027.

TABLE A.7

**Real GDP and its major components in Québec**

(percentage change and contribution in percentage points)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Change** | **Change** | **Change** | **Contribution** | **Contribution** | **Contribution** |
|  | **2025** | **2026** | **2027** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;**Domestic demand** | **1.8** | **0.7** | **1.0** | **1.9** | **0.7** | **1.0** |
| &nbsp;&nbsp;Household consumption | 1.1 | 1.3 | 1.6 | 0.7 | 0.8 | 0.9 |
| &nbsp;&nbsp;Residential investment | 8.1 | 0.3 | -1.2 | 0.5 | 0.0 | -0.1 |
| &nbsp;&nbsp;Non-residential business investment | 1.5 | -0.7 | 1.7 | 0.2 | -0.1 | 0.2 |
| &nbsp;&nbsp;Government spending and investment | 1.4 | 0.1 | 0.1 | 0.4 | 0.0 | 0.0 |
| &nbsp;&nbsp;**External sector** | **-** | **-** | **-** | **-1.4** | **0.4** | **0.4** |
| &nbsp;&nbsp;Exports | -1.7 | 1.2 | 2.2 | -0.7 | 0.5 | 0.9 |
| &nbsp;&nbsp;Imports | 1.4 | 0.2 | 1.2 | -0.7 | -0.1 | -0.6 |
| &nbsp;&nbsp;**Inventories** | **-** | **-** | **-** | **0.3** | **0.0** | **0.0** |
| &nbsp;&nbsp;**REAL GDP** | **0.8** | **1.1** | **1.4** | **0.8** | **1.1** | **1.4** |

---

Note: Totals may not add due to rounding.<br>Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

Budget 2026-2027 <br> A.22 Budget Plan

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![](exhibit99-11xu001.jpg)

❏ **Inflation remains under control, but upside risks are present**

In Québec, inflation, as measured by the Consumer Price Index (CPI), remains generally within the Bank of Canada's target range of 1% to 3%, despite monthly blips. Nevertheless, it remains vulnerable to geopolitical tensions, particularly in the Middle East, and developments in the trade dispute with the United States, factors that could exert further upward pressure on prices.

Over the coming months, inflation is expected to remain close to the 2% target.

- In Canada, annual CPI growth is expected to remain relatively stable, averaging 2.1% in 2026 and 2027.

- In Québec, inflation is expected to average 2.3% in 2026 and 2.1% in 2027.

In 2026, headline inflation in Québec is expected to be slightly higher than that observed in Canada.

- This trend is mainly due to housing prices, which are rising faster than in Canada, and to the decline in gasoline prices, which has been less pronounced in Québec than in the rest of the country.

- In addition, the recovery in housing starts in Québec since 2024, combined with a shrinking population, will continue to contribute to easing pressures on housing prices.

The vacancy rate for rental housing, which rose from 1.8% in 2024 to 2.7% in 2025, indicates that the market is well on its way to rebalancing.

TABLE A.8

**Consumer Price Index**

(percentage change)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2024** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;Québec | 2.3 | 2.4 | 2.3 | 2.1 |
| &nbsp;&nbsp;Canada | 2.4 | 2.1 | 2.1 | 2.1 |

---

Sources: Statistics Canada and Ministère des Finances du Québec. <br>

<br> Overview A.23

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![](exhibit99-11xu001.jpg)

**5. QUÉBEC'S FINANCIAL SITUATION**

This budget presents a budgetary situation that is proving to be better than that forecast last March. The more favourable results in 2025-2026 and 2026-2027 confirm the sound management of public finances.

- On a comparable basis to the budgetary balances of other Canadian provinces and the federal government, the accounting deficit has been adjusted downward by nearly $3.8 billion in 2025-2026, bringing it to $7.7 billion, or 1.2% of GDP.

- In 2026-2027, the accounting balance shows a deficit of $6.3 billion (0.9% of GDP), an improvement of $861 million compared to that forecast in Budget 2025-2026.

Efforts to return to a balanced budget are continuing in order to preserve the long-term sustainability of public finances.

- With expected growth in portfolio expenditures being compatible with reducing the share of expenditure in the economy, the government is respecting the established trajectory and demonstrating its commitment to achieving its objectives.

❏ **Financial framework**

Revenue amounts to $166.5 billion in 2026-2027, with growth of 3.7%. Growth will increase to 3.8% in 2027-2028.

- Over the period covered by the financial framework, that is, until 2030-2031, annual revenue growth will average 3.2%.

Total expenditure, or expenditures including debt service, stands at $170.8 billion in 2026-2027, growing 1.5%.[<sup>5</sup>](#_ftn5) Growth will be 2.6% in 2027-2028.

- Over the period covered by the financial framework, that is, until 2030-2031, annual growth in total expenditure will average 2.0%.

In addition, the financial framework includes a contingency reserve of $2.0 billion in 2026-2027 and $1.5 billion per year as of 2027-2028, for a total of $8.0 billion over five years, which could be used, in particular, to cover unforeseen expenditures or mitigate the effects of more-moderate-than-expected economic growth.

- As in 2024-2025, the $2.0-billion contingency reserve that was provided in 2025-2026 is not used.

- Over the period covered by the financial framework, the reserve has remained unchanged since Budget 2025-2026.

------

<sup>[5](#_ftnref5)</sup> Excluding 2025-2026 expenditures not recurring in 2026-2027, including advance payments for public transit infrastructure projects, growth in total expenditure would be 3.2% in 2026-2027 instead of 1.5%.

<br> Overview A.25

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![](exhibit99-11xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **One of the lowest budgetary deficits in Canada** |
| &nbsp;&nbsp; In 2025-2026, all Canadian provinces showed budgetary deficits. On a comparable basis to the budgetary balances of other Canadian provinces, that is, before deposits of dedicated revenues in the Generations Fund, Québec's deficit stood at $7.7 billion in 2025-2026, or 1.2% of GDP.<br> As a percentage of GDP, this is one of the lowest deficits among Canadian provinces, after Saskatchewan (0.4% of GDP), Alberta (0.9% of GDP) and Ontario (1.1% of GDP).<br> Like most Canadian provinces, Québec must rectify its fiscal deficit situation in the medium term. However, it stands out for having a law that, like in Ontario and Alberta, requires a plan or timeline for restoring balance when a deficit occurs.<br> - However, this law requires a return to a balanced budget after deposits of dedicated revenues in the Generations Fund, which imposes an additional constraint for Québec compared to other provinces.<br> Québec is aiming to return to a balanced budget by 2029-2030, while several other provinces with deficits have not set a date.<br> **2025-2026 budgetary balance**<br> (percentage of GDP)****<br>Notes: For Québec, it is the accounting deficit, that is, before deposits of dedicated revenues in the Generations Fund. This deficit is comparable to that of other provinces. <br>Chart information reflects data available as at March 6, 2026. |

---

Budget 2026-2027 <br> A.26 Budget Plan

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![](exhibit99-11xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Shares of revenue and expenditure in the economy** |
| &nbsp;&nbsp; The shares of government revenue and expenditure in the economy generally follow similar paths.<br> In 2026-2027, the share of revenue in the economy stands at 25.0%, below that for expenditure, which amounts to 25.6% of GDP.<br> - The decline in the share of revenue in the economy, from 26.1% in 2018-2019 to 25.0% in 2026-2027, is due in particular to the measures introduced by the government to return money to Quebecers, such as the tax reduction announced in Budget 2023-2024 and government contributions to limit school tax increases.<br> - The increase in the share of expenditure in the economy, from 24.4% in 2018-2019 to 25.6% in 2026-2027, results from government investments to ensure funding for public services, such as health and education. It is also linked to actions taken since 2018 to benefit Quebecers, such as the increases in the senior assistance amount announced in 2021 and 2022.<br> This gap will gradually be eliminated to maintain sound public finances over the long term.<br> - With the plan to restore fiscal balance, including measures for revenue and expenditure, the share of expenditure in the economy will gradually decline to 24.3% in 2030-2031, while that of revenue will rise to 24.7% over the same period.<br> **Shares of revenue and expenditure in the economy**<br> (percentage of GDP)<br> ![](exhibit99-11xu007.jpg) |

---

<br> Overview A.27

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![](exhibit99-11xu001.jpg)

**Adjustments to budgetary balances within the** <br>**meaning of the** ***Balanced Budget Act***

Under the *Balanced Budget Act*, the budgetary balance corresponds to the accounting surplus or deficit presented in the public accounts (surplus or deficit from operations) reduced by the amount of revenues dedicated to the Generations Fund and adjusted to take into account certain accounting changes, if applicable.<br>Budget 2026-2027 reports an improvement in the accounting deficit of nearly $3.8 billion in 2025-2026, $861 million in 2026-2027 and $219 million in 2027-2028.<br>Added to these adjustments are those of the deposits of dedicated revenues in the Generations Fund, which are up by $112 million in 2025-2026, due to the increase in investment income. For 2026-2027 and 2027-2028, the dedicated revenues have been adjusted downward by $55 million and $31 million, respectively. In 2027-2028, there is also a $250-million downward adjustment to the gap to be bridged.<br>Thus, the deficit within the meaning of the Act stands at $9.9 billion in 2025-2026, $8.6 billion in 2026-2027 and $5.7 billion in 2027-2028.<br>**Adjustments to budgetary balances within the meaning of the** ***Balanced Budget Act***<br> (millions of dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | **2025-2026** | **2026-2027** | **2027-2028** |
| &nbsp;&nbsp;**BUDGETARY BALANCE<sup>(1)</sup>** **- MARCH 2025** | **-13 607** | **-9 528** | **-5 695** |
| &nbsp;&nbsp;Adjustments to the economic and budgetary situation | 1 877 | 3 212 | 2 979 |
| &nbsp;&nbsp;Fall 2025 update initiatives | -65 | -218 | -195 |
| &nbsp;&nbsp;March 2026 initiatives | -37 | -2 133 | -2 565 |
| &nbsp;&nbsp;Contingency reserve adjustment | 2 000 |  |  |
| &nbsp;&nbsp;**Subtotal - Accounting surplus (deficit) adjustments** | **3 775** | **861** | **219** |
| &nbsp;&nbsp;Decrease in the gap to be bridged |  |  | -250 |
| &nbsp;&nbsp;Adjustments to deposits of dedicated revenues in the Generations Fund | -112 | 55 | 31 |
| &nbsp;&nbsp;**BUDGETARY BALANCE<sup>(1)</sup>** **- MARCH 2026** | **-9 944** | **-8 612** | **-5 695** |

---

Note: Totals may not add due to rounding.<br>(1) Budgetary balance within the meaning of the Balanced Budget Act.******

Budget 2026-2027 <br> A.28 Budget Plan

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![](exhibit99-11xu001.jpg)

TABLE A.9

**Multi-year financial framework**

(millions of dollars, unless otherwise indicated)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **AAGR<sup>(1)</sup>** |
| &nbsp;&nbsp;**Revenue** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Personal income tax | 49 003 | 50 800 | 52 687 | 54 667 | 56 629 | 58 734 |  |
| &nbsp;&nbsp;Contributions for health services | 9 175 | 9 412 | 9 749 | 10 198 | 10 498 | 10 826 |  |
| &nbsp;&nbsp;Corporate taxes | 14 102 | 14 527 | 15 296 | 15 358 | 15 968 | 17 037 |  |
| &nbsp;&nbsp;School property tax | 1 255 | 1 311 | 1 435 | 1 579 | 1 720 | 1 853 |  |
| &nbsp;&nbsp;Consumption taxes | 29 364 | 30 008 | 30 975 | 31 784 | 32 523 | 33 294 |  |
| &nbsp;&nbsp;Duties, permits and royalties | 6 311 | 6 542 | 6 939 | 7 204 | 7 537 | 7 792 |  |
| &nbsp;&nbsp;Miscellaneous revenue | 15 395 | 15 908 | 16 285 | 16 819 | 17 471 | 18 042 |  |
| &nbsp;&nbsp;Government enterprises | 5 347 | 5 853 | 6 442 | 6 984 | 7 096 | 7 254 |  |
| &nbsp;&nbsp;**Own-source revenue** | **129 952** | **134 361** | **139 808** | **144 593** | **149 442** | **154 832** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change***<sup>***(2)***</sup> | ***3.5*** | ***3.4*** | ***4.1*** | ***3.4*** | ***3.4*** | ***3.6*** | ***3.6*** |
| &nbsp;&nbsp;Federal transfers | 30 577 | 32 131 | 32 948 | 33 022 | 32 337 | 33 325 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *0.3* | *5.1* | *2.5* | *0.2* | *-2.1* | *3.1* | *1.7* |
| &nbsp;&nbsp;**Total revenue** | **160 529** | **166 492** | **172 756** | **177 615** | **181 779** | **188 157** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***2.8*** | ***3.7*** | ***3.8*** | ***2.8*** | ***2.3*** | ***3.5*** | ***3.2*** |
| &nbsp;&nbsp;**Expenditure** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Portfolio expenditures | -158 029 | -160 489 | -164 279 | -165 909 | -167 887 | -173 218 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(3)*</sup> | *4.5* | *1.6* | *2.4* | *1.0* | *1.2* | *3.2* | *1.9* |
| &nbsp;&nbsp;Debt service | -10 155 | -10 268 | -10 931 | -11 340 | -11 612 | -12 271 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *1.9* | *1.1* | *6.5* | *3.7* | *2.4* | *5.7* | *3.9* |
| &nbsp;&nbsp;**Total expenditure** | **-168 184** | **-170 757** | **-175 210** | **-177 249** | **-179 499** | **-185 489** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***4.3*** | ***1.5*** | ***2.6*** | ***1.2*** | ***1.3*** | ***3.3*** | ***2.0*** |
| &nbsp;&nbsp;Contingency reserve |  | -2 000 | -1 500 | -1 500 | -1 500 | -1 500 |  |
| &nbsp;&nbsp;**ACCOUNTING SURPLUS (DEFICIT)<sup>(4)</sup>** | **-7 655** | **-6 265** | **-3 954** | **-1 134** | **780** | **1 168** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.2*** | ***0.9*** | ***0.6*** | ***0.2*** | ***0.1*** | ***0.2*** |  |

---

Note: Totals may not add due to rounding.

(1) Average annual growth rate, corresponding to the geometric mean over five years, from 2026-2027 to 2030-2031.

(2) In 2027-2028, the growth in own-source revenue is primarily due to the 3.4% change in nominal GDP in 2027, <br>the increase in Hydro-Québec's results, and the effect of harmonization with the accelerated depreciation and expensing measures announced in the 2024 federal budget.

(3) Excluding 2025-2026 expenditures not recurring in 2026-2027, including advance payments for public transit infrastructure projects, the growth in portfolio expenditures would stand at 3.3% in 2026-2027 instead of 1.6%.

(4) The accounting surplus (deficit) refers to the operating surplus (deficit) as presented in the public accounts. <br>

<br> Overview A.29

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![](exhibit99-11xu001.jpg)

❏ **Returning to a balanced budget**

The government tabled a plan to restore fiscal balance in Budget 2025-2026. The plan demonstrated a prudent and responsible approach by forecasting a balanced budget by 2029-2030, after deposits of dedicated revenues in the Generations Fund, in accordance with the *Balanced Budget Act*.

- This budget provides an opportunity for the government to reiterate its commitment to the sound management of public finances and to present a more favourable budgetary situation than that forecast in March 2025.

- The more favourable-than-expected budget forecasts also make it possible to reduce the gap to be bridged by $250 million in 2027-2028 and in 2028-2029, $500 million in 2029-2030 and $750 million in 2030-2031.

- Once the uncertainty, mainly related to the CUSMA review, dissipates, the economic situation should recover and allow for the gaps to be bridged.

The budgetary balance according to the Act shows deficits of $9.9 billion in 2025-2026, or 1.5% of GDP, and $8.6 billion in 2026-2027, or 1.3% of GDP.

- This represents a downward adjustment of $3.7 billion in 2025-2026 and $916 million in 2026-2027.

Deficits will gradually decline until a balanced budget is achieved by 2029-2030.

CHART A.5

**Path for returning to a balanced budget**

(billions of dollars)

![](exhibit99-11xu008.jpg) <br>

Budget 2026-2027 <br> A.30 Budget Plan

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![](exhibit99-11xu001.jpg)

**5.1 Stimulating the economy through significant public infrastructure investments**

In the current environment, marked by significant uncertainty due mainly to U.S. trade policy, it is important for the government to support and stimulate the economy. Public infrastructure investments are an important lever available to the government to help not only increase Québec's economic potential, but also ensure quality public services.

- In response to uncertainties, the government had planned, in Budget 2025-2026, to increase infrastructure investments by $11 billion over three years, from 2025-2026 to 2027-2028, in the 2025-2035 Québec Infrastructure Plan (QIP).

With the dual objective of supporting the economy and providing Québec with modern infrastructure in good condition, in Budget 2026-2027, the government is planning:

- accelerated infrastructure investments of more than $5 billion over six years, from 2025-2026 to 2030-2031;

- From 2025-2026 to 2030-2031, investments will total $108.0 billion, which is $5.2 billion more than what was planned in the March 2025 budget.[<sup>6</sup>](#_ftn6)

- The additional $5.2 billion corresponds to an acceleration of $3.4 billion from 2026-2027 to 2030-2031 and advance payments of $1.8 billion in 2025-2026.

- a $3.0-billion increase in the 2026-2036 QIP, or from 2026-2027 to 2035-2036, to $167 billion.[<sup>7</sup>](#_ftn7)

Québec expects the federal government to contribute financially to the QIP, an important plan, particularly through the Build Communities Strong Fund and the Canada Public Transit Fund. Québec will use the federal funds as leverage to ensure that priority projects are carried out across its territory.

------

<sup>[6](#_ftnref6)</sup> Detailed explanations of infrastructure investments are provided on page 69 of Section F, "Québec's Financial Situation."

<sup>[7](#_ftnref7)</sup> The 2025-2035 QIP stood at $164 billion.

<br> Overview A.31

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![](exhibit99-11xu001.jpg)

CHART A.6

**Change in the Québec Infrastructure Plan**

(billions of dollars)

![](exhibit99-11xu009.jpg)

Source: Secrétariat du Conseil du trésor. <br>

Budget 2026-2027 <br> A.32 Budget Plan

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![](exhibit99-11xu001.jpg)

**6. THE QUÉBEC GOVERNMENT'S DEBT**

Québec has made notable progress in reducing its debt load in recent decades.

The net debt burden will stand at 38.8% of GDP as at March 31, 2026. This is lower than the pre-pandemic level, which was 42.9% as at March 31, 2019.

This reduction in indebtedness was achieved against a difficult backdrop marked by a pandemic, heightened geopolitical tensions caused, among other things, by Russia's invasion of Ukraine and a trade dispute with the United States.

Net debt to GDP will increase until 2027-2028 due to, in particular, the significant investments in public infrastructure needed to stimulate economic growth in a context of trade tensions with the United States. It will then fall back to 36.9% of GDP as at March 31, 2031. This will be much lower than the peak reached in 2013-2014, at 53.4% of GDP.

The government aims to reduce net debt to GDP to 35.5% by 2032-2033 and to 32.5% by 2037-2038. It will achieve this, in particular, by returning to a balanced budget after deposits in the Generations Fund starting in 2029-2030.

CHART A.7

**Net debt as at March 31**

(percentage of GDP)

![](exhibit99-11xu010.jpg)

Note: As of April 1, 2026, the concept of net debt will be replaced by that of net financial liabilities due to the new accounting standard on financial statement presentation coming into force. <br>

<br> Overview A.33

------

![](exhibit99-11xu001.jpg)

❏ **The net debt burden is lower than it was as at March 31, 2019**

As at March 31, 2026, net debt will stand at 38.8% of GDP, compared to 42.9% as at March 31, 2019. Therefore, over the last seven years, net debt to GDP will have fallen 4.1 percentage points, despite the pandemic, major investments in public infrastructure and reinvestment in public services.

The decrease in the net debt burden is largely explained by strong nominal economic growth during this period. Note that, during this same period, the government took action to boost the economy, namely by increasing Quebecers' disposable income and making significant investments in infrastructure.

❏ **Downward adjustment to net debt since the March 2025 budget**

For each year of the financial framework, the projected net debt is lower than it was in March 2025. This is due, in particular, to smaller deficits from 2024-2025 to 2026-2027. The level of GDP is also higher, which helps reduce the net debt burden.

Net debt is lower despite the higher investments in public infrastructure announced in this budget.

TABLE A.10

**Adjustments to net debt as at March 31 since the March 2025 budget**

(millions of dollars, unless otherwise indicated)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2026** | **2027** | **2028** | **2029** | **2030** |
| &nbsp;&nbsp;**March 2026** | **250 289** | **259 509** | **271 141** | **276 806** | **279 304** |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *38.8* | *38.9* | *39.3* | *38.8* | *37.9* |
| &nbsp;&nbsp;**March 2025** | **255 003** | **270 435** | **282 588** | **286 431** | **288 149** |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *40.4* | *41.5* | *41.9* | *41.0* | *39.8* |
| &nbsp;&nbsp;**Adjustments** | **-4 714** | **-10 926** | **-11 447** | **-9 625** | **-8 845** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***-1.6*** | ***-2.6*** | ***-2.6*** | ***-2.2*** | ***-1.9*** |

---

Budget 2026-2027 <br> A.34 Budget Plan

------

![](exhibit99-11xu001.jpg)

**APPENDIX: QUÉBEC'S ECONOMIC OUTLOOK - 2024 TO 2030**

TABLE A.11

**Economic outlook in Québec**<br> (annual average, percentage change, unless otherwise indicated)****

<br> ---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2024** | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** |
| &nbsp;&nbsp;**Production** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Real GDP | 1.7 | 0.8 | 1.1 | 1.4 | 1.5 | 1.5 | 1.4 |
| &nbsp;&nbsp;Nominal GDP | 5.9 | 4.5 | 3.5 | 3.4 | 3.4 | 3.4 | 3.3 |
| &nbsp;&nbsp;Nominal GDP (billions of dollars) | 616.8 | 644.4 | 666.9 | 689.9 | 713.6 | 737.7 | 762.4 |
| &nbsp;&nbsp;**Components of GDP** (in real terms) |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Final domestic demand | 3.1 | 1.8 | 0.7 | 1 | 1 | 1.1 | 1.1 |
| &nbsp;&nbsp;- Household consumption | 2.5 | 1.1 | 1.3 | 1.6 | 1.5 | 1.5 | 1.4 |
| &nbsp;&nbsp;- Government spending and investment | 2.5 | 1.4 | 0.1 | 0.1 | 0.3 | 0.6 | 0.9 |
| &nbsp;&nbsp;- Residential investment | 5.9 | 8.1 | 0.3 | -1.2 | -2.8 | -2.5 | -1.6 |
| &nbsp;&nbsp;- Non-residential business investment | 5.5 | 1.5 | -0.7 | 1.7 | 2.5 | 2.3 | 2.3 |
| &nbsp;&nbsp;Exports | 0.5 | -1.7 | 1.2 | 2.2 | 2 | 2 | 1.9 |
| &nbsp;&nbsp;Imports | 1.8 | 1.4 | 0.2 | 1.2 | 1.2 | 1.2 | 1.2 |
| &nbsp;&nbsp;**Labour market** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Population (thousands) | 8 995 | 9 058 | 9 045 | 9 025 | 9 012 | 9 007 | 9 014 |
| &nbsp;&nbsp;Population aged 15 and over - <br>Labour Force Survey (thousands) | 7 435 | 7 579 | 7 601 | 7 597 | 7 596 | 7 606 | 7 623 |
| &nbsp;&nbsp;Jobs (thousands) | 4 566 | 4 645 | 4 665 | 4 681 | 4 698 | 4 713 | 4 727 |
| &nbsp;&nbsp;Job creation (thousands) | 43.2 | 78.8 | 20.4 | 16.1 | 16.3 | 15.3 | 14 |
| &nbsp;&nbsp;Unemployment rate (per cent) | 5.3 | 5.6 | 5.4 | 4.6 | 4.2 | 4 | 4 |
| &nbsp;&nbsp;**Other economic indicators**<br>(in nominal terms) |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Household consumption | 5.1 | 4 | 3.8 | 3.6 | 3.4 | 3.3 | 3.2 |
| &nbsp;&nbsp;- Excluding food expenditures | 4.1 | 2.6 | 2.7 | 3.3 | 3.2 | 3.1 | 3 |
| &nbsp;&nbsp;Housing starts (thousands of units) | 48.7 | 59.9 | 56 | 49 | 41.5 | 36.9 | 33.9 |
| &nbsp;&nbsp;Residential investment | 9.4 | 14.2 | 3.4 | 1.2 | -0.3 | -0.2 | 0.8 |
| &nbsp;&nbsp;Non-residential business investment | 9.2 | 5.4 | 2.1 | 4.2 | 5.1 | 4.5 | 4.5 |
| &nbsp;&nbsp;Wages and salaries | 6 | 4.4 | 3 | 3.5 | 3.3 | 3.1 | 3.1 |
| &nbsp;&nbsp;Household income | 7.1 | 3.8 | 3.2 | 3.4 | 3.3 | 3.2 | 3.3 |
| &nbsp;&nbsp;Net operating surplus of corporations | 3.1 | 5.7 | 3.7 | 3.1 | 3.4 | 3.6 | 3.7 |
| &nbsp;&nbsp;Consumer Price Index | 2.3 | 2.4 | 2.3 | 2.1 | 2 | 2 | 2 |
| &nbsp;&nbsp;- Excluding food and energy | 2.7 | 2.7 | 2.3 | 2.1 | 1.9 | 1.9 | 1.9 |

---

Sources: Institut de la statistique du Québec, Statistics Canada, Canada Mortgage and Housing Corporation and Ministère des Finances du Québec.

<br> Overview A.35

------

## Exhibit 99.12

------

Exhibit 99.12

Section E

**THE QUÉBEC ECONOMY:** <br>**RECENT DEVELOPMENTS AND OUTLOOK** <br>**FOR 2026 AND 2027**<br>

---

| | |
|:---|:---|
| [**Summary**](#page_2) | [**E.3**](#page_2) |
| [**1. Québec's economic situation**](#page_9) | [**E.11**](#page_9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.1 The economy is adapting to the new trade reality](#page_9) | [E.11](#page_9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.2 The reduction in migration will lead to a population decline over the next few years](#page_11) | [E.13](#page_11) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.3 The Québec government maintains its objective of increasing economic potential](#page_13) | [E.15](#page_13) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.4 The shrinking labour pool will slow job creation](#page_16) | [E.18](#page_16) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.5 Domestic demand will fuel increased economic activity](#page_18) | [E.20](#page_18) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.6 Households will continue to exercise caution](#page_19) | [E.21](#page_19) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.7 Despite a slowdown, activity in the residential sector will remain robust](#page_21) | [E.23](#page_21) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.8 The environment will once again be favourable for business investment starting in 2027](#page_23) | [E.25](#page_23) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.9 Government investment supports growth](#page_24) | [E.26](#page_24) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.10 The external sector adjusts to the new trade environment](#page_25) | [E.27](#page_25) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.11 Inflation will stabilize around the Bank of Canada's target](#page_27) | [E.29](#page_27) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.12 Nominal GDP growth will decelerate](#page_30) | [E.32](#page_30) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.13 Forecasts comparable to those of the private sector](#page_31) | [E.33](#page_31) |
| [**2. The situation of Québec's main economic partners**](#page_33) | [**E.35**](#page_33) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.1 The economic situation in Canada](#page_34) | [E.36](#page_34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.2 The economic situation in the United States](#page_38) | [E.40](#page_38) |
| **[3. The global economic situation](#page_44)** | [**E.47**](#page_44) |
| **[4. Developments in financial markets](#page_50)** | [**E.53**](#page_50) |
| **[5. The main risks that may influence the forecast scenario](#page_55)** | [**E.59**](#page_55) |

---

E.1

------

![](exhibit99-12xu001.jpg)

**SUMMARY**

The global economy is undergoing a period of major transformation.

- After several decades of growth fuelled by globalization and free trade, a new context characterized by the rise of protectionism and heightened geopolitical tensions is emerging, disrupting supply chains and creating a climate of uncertainty that is weighing on investment and international trade. These tensions are also having significant impacts on financial markets, particularly energy markets.

- In addition, accelerated investment in artificial intelligence (AI) is expected to support productivity gains. This dynamic could encourage the emergence of new innovation hubs and reshape competition on a global scale. However, the enthusiasm surrounding AI in financial markets raises the risk that markets may overestimate the speed and scale of expected benefits.

Québec is nevertheless well positioned to deal with this new context. Supported by a solid economic foundation, it has the necessary assets to overcome challenges and take advantage of new opportunities that arise.

Notably, since 2018, Québec has outperformed the rest of Canada. The significant initiatives implemented by the Québec government to increase the potential of the economy have led to more wealth creation.

- Québec's strong performance has narrowed the gap in living standards, as defined by real GDP per capita, with its key partners.

&nbsp;&nbsp;&nbsp;&nbsp; **According to the most recent official statistics available, the standard of living rose by 4.9% in Québec between 2018 and 2024, while it fell in Ontario (-0.3%) and in the rest of Canada (-0.9%).**<br> – **The standard of living gap thus decreased from 15.9% in 2018 to 10.2% in 2024 in relation to Ontario and from 20.2% to 13.6% compared to the rest of Canada. Such small differences have never been observed since statistics began to be compiled in 1981.**<br>

- At the same time, the Québec government has continued to protect its citizens' wallets, thereby strengthening the financial position of Québec households.

- Between 2018 and 2024, household purchasing power, measured by disposable income in real terms per capita, improved by 9.2% in Québec compared to 5.1% in Ontario and in the rest of Canada.

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.3

------

![](exhibit99-12xu001.jpg)

- The increase in disposable income supported the savings rate in Québec. In 2024, it reached 8.3%, the highest among the provinces (5.0% in Canada).

- In addition, the household debt ratio, that is, the value of household liabilities as a proportion of disposable income, is lower in Québec (143.2% in 2024) than in Canada (182.3%).

- The Québec labour market is among the best performing in Canada. In 2025, Québec had an unemployment rate of 5.6%. Only Saskatchewan (5.2%) had a lower unemployment rate among the provinces (6.8% in Canada). Meanwhile, the employment rate for people aged 15 to 64 reached 77.4%, the highest in the country (74.2% in Canada).

- Québec's housing market also remains one of the most dynamic housing markets among the provinces, supported in particular by greater affordability than elsewhere in Canada.

In addition, the Canadian dollar, which remains at a relatively low level, supports the competitiveness of exports. Moreover, Québec exporters have adopted a number of strategies to mitigate the impact of tariffs, including diversifying their export markets.

- During the first 11 months of 2025, the not-seasonally adjusted value of Québec's international exports to destinations other than the United States rose by $2.9 billion (+9.8%) compared to the same period in 2024.

---

| |
|:---|
| &nbsp;&nbsp; **Québec is more exposed than Canada to conflict with the United States** |
| &nbsp;&nbsp; After experiencing strong growth in 2024 (+1.7%), real GDP growth in Québec slowed in 2025 to 0.8%. This increase is lower than that observed in Canada (+1.7%).<br> - The economic shock linked to the trade dispute triggered by the United States has had a greater impact on Québec than on Canada, due in particular to the concentration of tariffs in sectors where Québec is particularly active, including aluminum.<br> Although domestic demand strongly supported economic growth in 2025, both in Québec and Canada, the external sector significantly slowed real GDP growth in the province.<br> - The external sector made a negative contribution of 1.4 percentage points to real GDP growth in Québec, while subtracting 0.4 percentage points from economic growth in Canada.<br> - In particular, international exports in real terms fell by 2.9% in 2025 in Québec, compared to a 1.7% decline in Canada. |

---

Budget 2026-2027 <br> E.4 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **The global economy is proving resilient despite numerous disruptions**

Since early 2025, the increase in new tariffs imposed by the United States has disrupted trade and weighed on investment decisions. Furthermore, uncertainty surrounding U.S. tariff policy persists, with the United States administration threatening to add new tariffs or increase existing ones. Geopolitical tensions are also fuelling market volatility and heightening the risks to global economic growth.

- Despite these headwinds, global economic activity remains resilient, supported, in particular, by the significant budgetary deficits recorded in most advanced economies. Although these deficits are stimulating growth, they are a potential source of vulnerability for financial stability.

- Real GDP growth remained at 3.4% in 2025. Economic activity will continue to grow in 2026 and 2027, but at a slightly slower pace (+3.2% on average annually).

In the United States, despite unfavourable conditions caused by the tariff shock, immigration restrictions and the partial shutdown of the U.S. government at the end of the year, economic growth was fairly robust in 2025 (+2.2%).

- It was boosted, in particular, by the easing of financial and budgetary conditions, and by significant investments in artificial intelligence.

- Growth in the U.S. economy will maintain its momentum in 2026 (+2.3%), then see a slight slowdown in 2027 (+1.9%).

Meanwhile, the Québec economy is gradually adapting to this new reality, but uncertainty surrounding the trade dispute with the United States will remain high. <br>In addition, real GDP growth will be limited by the demographic outlook.

- After a gain of 0.8% in 2025, economic growth is expected to increase by 1.1% in 2026 and 1.4% in 2027.

TABLE E.1

**Economic growth**

(real GDP, percentage change)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2024** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;Québec | 1.7 | 0.8 | 1.1 | 1.4 |
| &nbsp;&nbsp;Canada | 2.0 | 1.7 | 1.1 | 1.6 |
| &nbsp;&nbsp;United States | 2.8 | 2.2 | 2.3 | 1.9 |
| &nbsp;&nbsp;World<sup>(1)</sup> | 3.4 | 3.4 | 3.2 | 3.2 |

---

(1) Global GDP is expressed in purchasing power parity.

Sources: Institut de la statistique du Québec, Statistics Canada, International Monetary Fund, S&P Global, LSEG Datastream, Bloomberg, Eurostat and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.5

------

![](exhibit99-12xu001.jpg)

Trade relations between Canada and the United States will evolve toward a new equilibrium, marked by persistent tariff measures.

- Budget 2026-2027 is based on the premise that the average effective tariff rate will remain relatively stable over the next few years.

- Furthermore, the July 2026 review of the Canada-United States-Mexico Agreement (CUSMA) could lead to a reduction in uncertainty.

---

| |
|:---|
| &nbsp;&nbsp; **An economic forecast in an environment of great uncertainty** |
| &nbsp;&nbsp; Developments in the trade dispute with the United States and the CUSMA review are the main risks to the baseline scenario. In this context, the Ministère des Finances is presenting two alternative economic forecasts in Section H of the *Québec Budget Plan - March 2026*.<br> - Specifically, an increase in tariffs, the application of further sectoral tariffs or a possible withdrawal of the United States from CUSMA could exacerbate supply chain disruptions and cause a sharper slowdown in international trade, thus dampening economic growth, particularly in investment and exports. Furthermore, the tense geopolitical situation in several regions of the world, particularly in the Middle East, could also slow the economy.<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ This scenario would result in a recession. Economic activity in Québec would then decline by 0.2% in 2026, before growing by 0.8% in 2027.<br> - Conversely, if a trade agreement were to be reached between Canada and the United States or certain sectoral tariffs were to be withdrawn, this would reduce uncertainty and stimulate economic growth.<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ Real GDP would increase by 1.6% in 2026, 2.0% in 2027 and 1.8% in 2028. |

---

Budget 2026-2027 <br> E.6 Budget Plan

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **The effective tariff rate remains low, but uncertainty persists** |
| &nbsp;&nbsp; Since the beginning of 2025, the United States has imposed various tariffs on many trading partners, including Canada. However, a significant proportion of Canadian products remains exempt from these tariffs if they comply with the rules set out in the Canada-United States-Mexico Agreement (CUSMA).<br> - The coming into force of the tariff measures in early 2025 prompted companies to adjust their supply chains and production processes, while ensuring that they completed the necessary documentation to comply with CUSMA requirements.<br> - According to U.S. government statistics, in December 2025, 86.4% of Canadian exports to the United States met the CUSMA compliance criteria and were therefore exempt from tariffs, compared to an average of 37.6% in 2024.<br> In this context, despite the many announcements of tariff increases, the effective tariff rate applied to all Canadian exports to the U.S. market remains relatively moderate.<br> - In December, this rate averaged 3.3%. It could, nevertheless, increase in the coming months should new measures targeting certain sectors be implemented.<br> Furthermore, CUSMA, which came into force in 2020, will be subject to a review in July 2026. In the absence of consensus between the parties, the agreement will not end immediately but will have to be renewed and reviewed on an annual basis until 2036. In addition, if one of the partners decides to withdraw from the agreement, this decision will only take effect after six months' notice. This review mechanism maintains persistent uncertainty, as any questioning of this preferential access poses a significant risk to Canada's and Québec's growth outlook.<br> **Average effective rate of U.S. tariffs on Canadian products in 2025**<br> (per cent)<br> Note: These are estimated rates based on the tariffs actually applied at customs, to which an estimate of the tariffs on lumber (part of the anti-dumping and countervailing duties) were added. This estimate differs from the theoretical effective rate based on the value of 2024 imports.<br> Sources: U.S. Census Bureau, U.S. Customs and Border Protection, U.S. International Trade Commission and Ministère de l'Économie, de l'Innovation et de l'Énergie. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.7

------

![](exhibit99-12xu001.jpg)

❏ **Inflationary pressures will remain limited despite U.S. protectionist measures**

Despite rising protectionism in the United States and the introduction of high tariffs, inflationary pressures remained relatively contained in 2025, and price growth slowed in several economies.

- This moderating inflation is due, in particular, to lower energy prices. Energy prices fell by 2.0% in Québec in 2025.

In the short term, upward and downward pressures on prices are expected to continue to balance each other out, allowing inflation to remain moderate. Consequently, the latter is expected to remain fairly close to central bank targets.

In Canada, annual growth in the Consumer Price Index (CPI) is expected to average 2.1% in 2026 and 2027. In Québec, inflation is expected to stand at 2.3% in 2026 and 2.1% in 2027.

- Since April 2025, inflation in the province has exceeded that observed across the country. This trend is due in particular to housing costs, which are rising more rapidly than in Canada. In addition, the removal of the carbon tax for Canadian consumers, with the exception of Québec, on April 1, 2025, temporarily accentuated the decline in gasoline prices elsewhere in the country.

Over the next few months, annual inflation in Québec is expected to return to a growth rate comparable to that observed in Canada. In particular, the temporary effect on inflation resulting from the abolition of the carbon tax in Canada will dissipate starting in April 2026. In addition, the gradual rebalancing of the Québec residential market will help ease pressure on housing prices.

&nbsp;&nbsp;&nbsp;&nbsp; **The vacancy rate for rental housing, which rose from 1.8% in 2024 to 2.7% in 2025 in Québec, indicates that the market is well on its way to rebalancing.**<br>

However, price growth remains exposed to various risks, including geopolitical tensions and developments in the trade dispute.

TABLE E.2<br>**Consumer Price Index**

(percentage change)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2024** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;Québec | 2.3 | 2.4 | 2.3 | 2.1 |
| &nbsp;&nbsp;Canada | 2.4 | 2.1 | 2.1 | 2.1 |
| &nbsp;&nbsp;United States | 3.0 | 2.7 | 2.6 | 2.4 |
| &nbsp;&nbsp;Euro area<sup>(1)</sup> | 2.4 | 2.1 | 1.9 | 2.0 |
| &nbsp;&nbsp;World<sup>(1)</sup> | 5.8 | 4.1 | 3.8 | 3.4 |

---

(1) International Monetary Fund's January 2026 forecast.<br>Sources: Statistics Canada, S&P Global, International Monetary Fund, Eurostat and Ministère des Finances du Québec.

Budget 2026-2027 <br> E.8 Budget Plan

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Effects of the conflict in the Middle East on the Québec economy** |
| &nbsp;&nbsp; **A sharp increase in oil prices due to the conflict**<br> The economic forecasts incorporate the information available as at March 6, 2026. However, with the situation evolving rapidly and energy prices showing significant volatility, it is important to remain cautious about the economic effects of the conflict.<br> The outbreak of a new armed conflict in the Middle East at the end of February caused significant disruption to global energy markets, resulting, among other things, in a sharp rise in oil prices.<br> - As at March 6, 2026, the price of WTI oil had jumped more than 30% since the start of the conflict to around US$90 per barrel, compared to US$67 per barrel on February 27 (an increase of more than 50% since the beginning of 2026).<br> - The closure of the Strait of Hormuz, through which approximately 20% of global oil consumption passes, largely explains the surge in oil prices.<br> The Ministère des Finances du Québec is making the assumption that the conflict should last about six weeks. Therefore, the upward impact on oil prices should be largely concentrated in March and April 2026, with an estimated average impact for the year of US$4 per barrel (+7%). Subsequently, a gradual decline in prices toward the levels anticipated before the start of the conflict should be seen.<br> - Furthermore, sharp fluctuations in oil prices are frequently seen during periods of geopolitical tension, particularly in the Middle East. Against this backdrop, prices are expected to remain volatile in the short term, with significant spikes possible.<br> **Short-term negative effects for households and Québec businesses**<br> Despite an upward impact on prices stemming from higher oil prices, the economic impact in Québec should be relatively modest according to our forecasts. However, negative effects could become more apparent in the coming weeks for households and businesses.<br> - For households, this means adjusting their consumption basket to cope with rising energy prices. For businesses, this represents an increase in their production costs.<br> However, sizable risks remain. A significant deterioration in the situation in the Middle East and a sustained rise in energy prices could lead to greater inflationary pressures and slow down the economy. These changes could spur the Ministère des Finances du Québec to adjust its global forecasts and those for Quebec. The Ministère will monitor the situation closely over the coming months. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.9

------

![](exhibit99-12xu001.jpg)

**1. QUÉBEC'S ECONOMIC SITUATION**

1.1 **The economy is adapting to the new trade reality**

Following strong growth in 2024 (+1.7%), Québec's economy gradually adapted to the new trade reality and real GDP growth slowed in 2025 (+0.8%). It is expected to strengthen gradually, reaching 1.1% in 2026 and 1.4% in 2027.

- Domestic demand will continue to provide significant support for economic activity, bolstered, in particular, by government measures aimed at protecting Quebecers' purchasing power. In addition, relatively low interest rates and a labour market that will remain tight will continue to support growth.

Québec's economy will withstand the ongoing trade disruptions, but uncertainty will remain.

- The U.S. administration is maintaining high tariffs on certain Canadian products, including aluminum, and is suggesting that it could introduce more. Furthermore, the effective tariff rate remains low, as a larger percentage of Canadian exports meets CUSMA compliance criteria. However, the Agreement will undergo a review in 2026, and the outcome of the negotiations is uncertain.

- In addition, population aging as well as the decline in temporary and permanent immigration will limit economic gains in the coming years. Specifically, policies implemented by the federal government and aimed at reducing the proportion of non-permanent residents to 5% of the population by 2028 are expected to temporarily slow population growth, which had reached record levels in 2023 <br>and 2024.

- In addition, the geopolitical situation remains tense, particularly in the Middle East.

CHART E.1<br>**Economic growth in Québec**

(real GDP, percentage change)

![](exhibit99-12xu064.jpg)

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.11

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Economic activity has been slowed by certain sectors**<br>**that are more exposed to international trade** |
| &nbsp;&nbsp; The Québec economy, which is heavily dependent on international trade, has been weakened by the tightening of protectionist policies implemented by its main trading partner and by uncertainty surrounding its external relations. <br> Since the beginning of 2025, the economy has been showing signs of slowing down. This moderation is due to the contraction in output in sectors that are suffering the consequences of tariffs and trade uncertainty. <br> - These include manufacturing as well as transportation and warehousing. In particular, in November 2025, manufacturing output volume hit its lowest level since July 2020.<br> - For the first 11 months of 2025 compared to the same period in 2024, production in these industries declined by 3.1%.<br> - In particular, real GDP in the manufacturing sector fell by 3.8% during this period. Of the 18 subsectors in this segment, 14 recorded a decline. The most significant declines were observed in the paper (-19.1%), electrical equipment, appliances and components (-14.7%), primary metal (-10.7%), printing (-9.2%), and furniture and related products (-8.6%) subsectors.<br> Conversely, sectors less sensitive to the trade dispute continued to support total production, partially offsetting the shock and preventing a more pronounced economic slowdown overall.<br> - For the first 11 months of 2025 compared to the same period in 2024, economic growth in other industries posted a gain of 1.4%.<br> On the whole, despite considerable resilience in 2025, economic growth by industry confirms that trade tensions are holding back export-related sectors. |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Real GDP for certain industries in Québec in the cumulative of available months in 2025**<br> (per cent) | | |
|  | **Weight in 2024** | **Change<sup>(1)</sup>** |
| &nbsp;&nbsp;**Industries sensitive to the trade dispute** | **16.4** | **-3.1** |
| &nbsp;&nbsp;- Manufacturing | 12.2 | -3.8 |
| &nbsp;&nbsp;- Transportation and warehousing | 4.2 | -0.8 |
| &nbsp;&nbsp;**Other industries** | **83.6** | **1.4** |
| &nbsp;&nbsp;**ALL INDUSTRIES** | **100.0** | **0.7** |

---

(1) For the first 11 months of 2025 compared to the same period in 2024.

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. <br>

Budget 2026-2027 <br> E.12 Budget Plan

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![](exhibit99-12xu001.jpg)

**1.2 The reduction in migration will lead to a population decline over the next few years**

Federal and provincial immigration policies have had a marked effect on population growth, which, after reaching record levels in recent years, slowed significantly <br>in 2025.

- In fact, the population of Québec grew by only 0.7% in 2025, after a significant increase of 2.0% in 2024. In Canada, population growth slowed to 0.9% in 2025, after a gain of 3.0% in 2024.

This downward trend will continue over the next few years, and Québec is expected to see slight population declines until 2029, with a decrease of 0.1% in 2026 and 0.2% in 2027 in particular. Population growth in Canada is expected to remain stable <br>in 2026 (0.0%) and 2027 (+0.1%).

- The population decline will particularly affect those aged 15 to 64, who represent the main pool of potential workers and also constitute the largest age group within the immigrant population.

- In Québec, the number of non-permanent residents is expected to decrease from approximately 562 300 in 2025 to 375 000 by the end of 2029.

- At the same time, last fall the Québec government unveiled its permanent immigration targets for 2026 to 2029. The number of permanent immigrants will go down from 65 000 per year to 45 000 for 2026 to 2029.

---

| | |
|:---|:---|
| CHART E.2 | CHART E.3 |
| **Population in Québec and Canada** | **Population aged 15 to 64 in Québec and Canada** |
| (percentage change) | (percentage change) |
| ![](exhibit99-12xu065.jpg) | ![](exhibit99-12xu066.jpg) |
|  Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. | Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.13

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![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **The expected reduction in immigration curbs population growth** |
| &nbsp;&nbsp; **Population growth spurred by international immigration**<br> As of July 1, 2025, Québec had a population of 9 058 300, an increase of 62 800 (+0.7%) compared to 2024. This population growth was driven entirely by net international migration.<br> - Québec welcomed over 57 600 permanent immigrants in 2025, and the number of non-permanent residents increased by approximately 21 000.<br> - Interprovincial migration losses totalled just under 5 100 people in 2025. Natural increase, which is the difference between births and deaths, has been negative <br>since 2024 (-2 500 people in 2025).<br> **A deceleration in population growth will continue**<br> Although the population continued to grow in 2025 (+0.7%), population growth slowed compared to the strong increases of 2023 (+1.8%) and 2024 (+2.0%). With the exception of 2021, which was marked by border restrictions due to the pandemic, the growth <br>in 2025 represented the lowest annual increase recorded since 2016.<br> The policies implemented by the federal and Québec governments to reduce the number of non-permanent residents slowed the growth of temporary immigration in 2025.<br> - After reaching a peak of 134 400 in 2024, net non-permanent resident intake<sup>1</sup> in Québec declined to approximately 21 000 in 2025.<br> The slowdown in population growth will continue over the next few years as the number of non-permanent residents in Québec continues to decline and natural increase remains negative.<br> **Components of population growth in Québec**<br> (annual change in population and its components, in thousands of people)<br> Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. |
|  1 Net non-permanent resident intake refers to the balance representing the difference between the number of people arriving in the province to reside there temporarily and the number of people leaving. |

---

Budget 2026-2027 <br> E.14 Budget Plan

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![](exhibit99-12xu001.jpg)

**1.3 The Québec government maintains its objective of increasing economic potential** 

Since the fall of 2018, significant steps have been taken to increase Québec's economic potential to create more wealth. These steps have supported strong economic performance, which resulted in a considerable increase in the standard of living, as defined by real GDP per capita.

Nevertheless, in 2023 and 2024, the standard of living decreased slightly in Québec.

- The effects of high inflation and restrictive monetary policy slowed the growth of real GDP in 2023. In addition, temporary factors specific to Québec, such as forest fires, low runoff in Hydro-Québec basins, and strikes in the public and parapublic sectors, also slowed economic activity.

- In 2024, Québec's record population growth, due to immigration, moderated the impact of accelerated real GDP growth on the standard of living.

In 2025, growth in economic activity, combined with slower population growth, allowed the standard of living to resume an upward trajectory (+0.1%). This trend will accelerate in 2026 and 2027 (+1.5% on average annually).

- In 2027, real GDP per capita should stand at $55 451, which represents a gain of 8.1% compared to 2018.

CHART E.4<br>**Québec's standard of living**

(real GDP in chained 2017 dollars per capita)

![](exhibit99-12xu068.jpg)

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.15

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![](exhibit99-12xu001.jpg)

❏ **Gaps in living standards with Ontario and the rest of Canada have narrowed significantly since 2018**

Québec's strong economic performance since 2018 has narrowed the gaps in living standards with Ontario and the rest of Canada.

- According to the most recent official statistics available, the standard of living, measured by real GDP per capita, increased by 4.9% in Québec between 2018 and 2024.

- For the same period, it fell by 0.3% in Ontario and 0.9% in the rest of Canada.

Québec's standard of living gap with Ontario narrowed from 15.9% in 2018 to 10.2% in 2024. After reaching 20.2% in 2018, the standard of living gap with the rest of Canada stood at 13.6% in 2024.

- Such small differences have never been observed since statistics began to be compiled in 1981.

In 2025, the upheavals linked to the trade dispute and changes to immigration policy led to a moderation in economic growth in Québec. This situation, combined with significant changes to immigration policies, led to a slight increase in the standard of living gap in the short term (10.7% in relation to Ontario and 14.6% compared to the rest of Canada).

- Over the next few years, the standard of living gap will remain close to the low point reached in 2024. Furthermore, the government intends to continue to act on the main determinants of living standards and to intensify its efforts to close the gap between Québec and Ontario by 2036.

TABLE E.3<br>**Change in standard of living**

(real GDP per capita, change and gap with Québec in per cent)

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2018** | **2019** | **2020** | **2021** | **2022** | **2023** | **2024** | **2025** | **2026** | **2027** | **Between<br>2018 and<br>2027<sup>(1)</sup>** |
| **Change** |  |  |  |  |  |  |  |  |  |  |  |
| Québec | 1.6 | 1.7 | -5.5 | 7 | 3.3 | -1 | -0.3 | 0.1 | 1.3 | 1.7 | 8.1 |
| Ontario | 1.5 | 0.4 | -5.8 | 5.5 | 2.2 | -0.7 | -1.6 | 0.6 | 1 | 1.7 | 3 |
| Rest of Canada | 1.2 | 0.1 | -6.2 | 5 | 2.6 | -0.8 | -1.2 | 1 | 1 | 1.4 | 2.5 |
| **Gap** |  |  |  |  |  |  |  |  |  |  |  |
| Ontario | 15.9 | 14.4 | 14.1 | 12.5 | 11.3 | 11.6 | 10.2 | 10.7 | 10.4 | 10.5 |  |
| Rest of Canada | 20.2 | 18.4 | 17.5 | 15.3 | 14.4 | 14.6 | 13.6 | 14.6 | 14.3 | 14 | - |

---

Note: Ontario's real GDP growth from 2025 to 2027 corresponds to the average forecast of nine private sector institutions as at March 6, 2026. For the rest of Canada and the Ontario population in 2026 and 2027, these represent the growth forecasts for Canada excluding Québec.

(1) Changes over the entire period.

Sources: Institut de la statistique du Québec, Statistics Canada, Ontario Ministry of Finance and Ministère des Finances du Québec. <br>

Budget 2026-2027 <br> E.16 Budget Plan

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![](exhibit99-12xu001.jpg)

❏ **Determinants of Québec's economic potential**

The government has set itself the objective of raising the standard of living for Quebecers, and it does not intend to deviate from this mission despite U.S. protectionist policies, which are limiting growth of economic activity. It will achieve this objective by acting on the determinants of growth.

**Productivity**, which is real GDP per job, measures the efficiency of workers to transform their efforts into output. Productivity gains offer the greatest potential for improvement to support growth in the standard of living in Québec.

- After recording a 0.7% increase in 2024, productivity dropped in 2025. This decline stems from the slowdown in real GDP growth amid trade tensions, while the labour market is showing resilience. Productivity will return to growth in 2026 (+0.7%) and this growth will accelerate in 2027.

The **employment rate**, which is the total number of workers as a proportion of the population aged 15 to 64, reached an all-time high in 2023. Although the employment rate declined in 2024, it remains the highest among the provinces. In the current context of an aging population, strong labour market participation will be necessary to continue supporting economic growth.

The **demographic weight of the main labour pool** represents the share of the population aged 15 to 64 compared to the total population. Québec's population is aging, which limits the growth of the available labour pool. As a result, this factor's contribution to growth has been declining since the mid-2000s. Demographic trends are difficult to reverse, and it is expected that this component will continue to limit potential GDP.

TABLE E.4<br>**Contribution of factors to economic growth**

(average annual percentage change and contribution in percentage points)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2010**<br>**to 2019** | **2020** | **2021** | **2022** | **2023** | **2024** | **2025** | **2026** | **2027** | **2028 to<br>2030** |
| **Growth factors (contribution)** |  |  |  |  |  |  |  |  |  |  |
| Demographic weight of 15- to 64-year-olds<sup>(1)</sup> | -0.7 | -0.7 | -0.8 | -0.6 | -0.2 | 0 | -0.5 | -0.8 | -0.7 | -0.5 |
| Employment rate<sup>(2)</sup> | 1 | -5 | 4.8 | 2.5 | 1.4 | -1 | 1.5 | 1.4 | 1.3 | 0.9 |
| Productivity<sup>(3)</sup> | 0.8 | 0.2 | 2.9 | 1.4 | -2.2 | 0.7 | -0.9 | 0.7 | 1.1 | 1.1 |
| **STANDARD OF LIVING<sup>(4)</sup>** | **1.1** | **-5.5** | **7.0** | **3.3** | **-1.0** | **-0.3** | **0.1** | **1.3** | **1.7** | **1.5** |
| Real GDP | 1.9 | -4.7 | 7.3 | 4.5 | 0.7 | 1.7 | 0.8 | 1.1 | 1.4 | 1.4 |
| Population | 0.8 | 0.8 | 0.2 | 1.1 | 1.8 | 2 | 0.7 | -0.1 | -0.2 | 0 |

---

Note: Totals may not add due to rounding.

(1) The demographic weight of 15- to 64-year-olds represents the share of the population aged 15 to 64 as a percentage of the total population.

(2) The employment rate corresponds to the total number of workers in proportion to the population aged 15 to 64.

(3) Productivity as measured by real GDP per job.

(4) Standard of living as measured by real GDP per capita.

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.17

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![](exhibit99-12xu001.jpg)

**1.4 The shrinking labour pool will slow job creation**

The labour market remained resilient in 2025, despite the uncertain trade environment.

- On average for the year as a whole, 78 800 jobs were created (+1.7%). Meanwhile, the unemployment rate increased slightly from an average of 5.3% in 2024 to an average of 5.6% in 2025.

Over the next few years, the anticipated reduction in the labour force, due to the combined effects of population aging and declining immigration, is expected to result in more moderate employment growth.

- The labour force, defined as the number of people aged 15 and over who are looking for work or are employed, will grow by only 0.2% in 2026, before declining by 0.5% in 2027.

- The shrinking labour pool will dampen job creation. As a result, approximately 20 000 jobs will be created in 2026 (+0.4%) and 16 100 positions will be added in 2027 (+0.3%).

Since employers will have to deal with a smaller labour pool to fill their available positions, the unemployment rate is expected to decline to an average of 5.4% <br>in 2026 and 4.6% in 2027.

- Against this backdrop, Québec will continue to move close to full employment. Some sectors could experience labour shortages, which would make recruitment more difficult and could put pressure on wages.

---

| | |
|:---|:---|
| CHART E.5 | CHART E.6 |
| **Job creation in Québec** | **Unemployment rate in Québec** |
| (annual data in thousands) | (annual data in per cent) |
| ![](exhibit99-12xu069.jpg) | ![](exhibit99-12xu070.jpg) |
| Sources: Statistics Canada and Ministère des Finances du Québec. | Sources: Statistics Canada and Ministère des Finances du Québec. |

---

Budget 2026-2027 <br> E.18 Budget Plan

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![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **The labour market remained resilient in Québec in 2025** |
| &nbsp;&nbsp; In an uncertain economic climate marked by trade tensions and the demographic slowdown, the labour market remained resilient in 2025.<br> - For the year as a whole, 78 800 jobs were created (+1.7%), which is stronger than in Ontario (+1.0% in 2025) and Canada (+1.4%).<br> - Québec had an unemployment rate of 5.6%. Only Saskatchewan (5.2%) had a lower unemployment rate among the provinces (6.8% in Canada). In addition, the employment rate for the population aged 15 to 64, which reached an average <br>of 77.4% in 2025, was the highest among the provinces (74.2% in Canada).<br> Despite this strong performance, the labour market is showing some signs of slowing down.<br> - Although it remains at a relatively low level, the unemployment rate rose from an average of 5.3% in 2024 to 5.6% in 2025. Furthermore, after peaking in September 2021 (258 100 positions), the number of job vacancies declined <br>to 118 300 in December.<br> This change was reflected in employees' hourly wages, which rose by 3.6% in 2025 in Québec. Although this increase remains higher than the average rate observed during the 10 years preceding the pandemic (2.4% on average between 2010 and 2019), it is moderate compared to recent increases, which had peaked at 5.8% on average in 2022.<br> Over the coming months, job creation is expected to continue, but gains are projected to remain limited.<br> - A less dynamic economic environment, combined with the decline in the working-age population, will lead to slower job creation.<br> - In addition, the decline in overall demand for goods and services resulting from the trade dispute will moderate hiring.<br> \| Change in employment in 2025 \| <br> \| Unemployment rate in 2025 \|<br> \|:---\|:---\|:---\|<br> \| (average annual data in per cent) \| <br> \| (average annual data in per cent) \|<br> \| \| <br> \| \|<br> \| Source: Statistics Canada. \| <br> \| Source: Statistics Canada. \| |

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The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.19

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![](exhibit99-12xu001.jpg)

**1.5 Domestic demand will fuel increased economic activity**

Domestic demand will remain the main driver of real GDP growth in 2026 and 2027, but its contribution will slow, mainly due to population decline, which will reduce demand for goods and services.

- After exercising caution in 2025, households will increase their spending, supported in part by the tax relief measures announced in the fall 2025 update and coming into force in January 2026, as well as by the measures announced by the federal government in its most recent budget. The favourable financial position of households, relatively low borrowing costs, a labour market that will remain tight, and rising asset values will also support consumption.

- Supported by policy rate cuts, residential investment gained momentum in 2025 (+8.1%). Its growth will continue in 2026, but at a more moderate pace (+0.3%), before decreasing by 1.2% in 2027.

- Uncertainty surrounding trade relations with the United States will slow non-residential business investment in 2026. It is expected to subsequently recover, as uncertainty surrounding U.S. trade policy eases.

The external sector will contribute 0.4 percentage points to real GDP growth in 2026 and 2027. As companies continue to adapt to the new trade environment, exports will return to growth.

TABLE E.5<br>**Real GDP and its major components in Québec**

(percentage change and contribution in percentage points) <br>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Change** | **Change** | **Change** | **Contribution** | **Contribution** | **Contribution** |
| | **2025** | **2026** | **2027** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;**Domestic demand** | **1.8** | **0.7** | **1.0** | **1.9** | **0.7** | **1.0** |
| &nbsp;&nbsp;Household consumption | 1.1 | 1.3 | 1.6 | 0.7 | 0.8 | 0.9 |
| &nbsp;&nbsp;Residential investment | 8.1 | 0.3 | -1.2 | 0.5 | 0.0 | -0.1 |
| &nbsp;&nbsp;Non-residential business investment | 1.5 | -0.7 | 1.7 | 0.2 | -0.1 | 0.2 |
| &nbsp;&nbsp;Government spending and investment | 1.4 | 0.1 | 0.1 | 0.4 | 0.0 | 0.0 |
| &nbsp;&nbsp;**External sector** | **-** | **-** | **-** | **-1.4** | **0.4** | **0.4** |
| &nbsp;&nbsp;Exports | -1.7 | 1.2 | 2.2 | -0.7 | 0.5 | 0.9 |
| &nbsp;&nbsp;Imports | 1.4 | 0.2 | 1.2 | -0.7 | -0.1 | -0.6 |
| &nbsp;&nbsp;**Inventories** | **-** | **-** | **-** | **0.3** | **0.0** | **0.0** |
| &nbsp;&nbsp;**REAL GDP** | **0.8** | **1.1** | **1.4** | **0.8** | **1.1** | **1.4** |

---

Note: Totals may not add due to rounding.<br>Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

Budget 2026-2027 <br> E.20 Budget Plan

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![](exhibit99-12xu001.jpg)

**1.6 Households will continue to exercise caution**

Despite relatively low household confidence and persistent uncertainty, consumption remained the main driver of economic activity in 2025. Household expenditure growth will accelerate in 2026 and 2027, fuelled in part by their favourable financial position. Consumers will also continue to benefit from low interest rates, particularly when purchasing durable goods.

- Additionally, households will benefit from the support provided by certain measures presented in the Québec government's fall 2025 update, which aimed to protect the purchasing power of Quebecers by putting money back in their wallets.

- These measures included the reduction of contribution rates to the Québec Pension Plan and the Québec Parental Insurance Plan, as well as the indexation of the tax system and social assistance benefits at a rate of 2.05%.

- Nevertheless, the decline in the population will dampen demand for goods and services.

Furthermore, even as interest rates fall, some households will see higher mortgage payments upon renewal, which could limit their purchasing power and encourage them to exercise caution.

---

| | |
|:---|:---|
| CHART E.7 | CHART E.8 |
| **Household consumption expenditure in Québec** | **Changes in various interest rates in Canada** |
| (percentage change, in real terms) | (per cent) |
| ![](exhibit99-12xu073.jpg) | ![](exhibit99-12xu074.jpg) |
|  Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. | Note: The weighted residential mortgage rate represents the average rate on funds advanced, which is calculated based on interest rates for new residential mortgage lending in Canada.<br> Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. |

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The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.21

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![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Québec households are benefiting from a favourable financial situation** |
| &nbsp;&nbsp; **Québec's household purchasing power per capita has improved faster than in Canada since 2018**<br> Purchasing power is defined as household disposable income in real terms per capita. In Québec, it improved considerably between 2018 and 2024. Over this period, it grew by 9.2%, the strongest increase among the provinces (+6.0% in Canada).<br> - This is due in part to the strong performance of the labour market and the shortage of labour, which have led to significant wage gains. Between 2018 and 2024, per capita wages and salaries in Québec jumped 35.5% (+25.8% in Canada).<br> - Furthermore, household purchasing power has been supported by a number of measures put in place by the Québec government since fall 2021, including a reduction in personal income tax, enhanced senior assistance, the introduction of two one-off cost of living support payments and a 3% cap on the indexation of government rates.<br> The improved purchasing power observed in recent years has strengthened the financial position of Québec households.<br> - Québec's savings rate (8.3% in 2024) remained higher than the savings rate observed in Canada (5.0% in 2024).<br> - In addition, the household debt ratio, that is, the value of household liabilities as a proportion of disposable income, was lower in Québec (143.2% in 2024) than in Canada (182.3% in 2024).<br> \| Growth in household disposable income per capita between 2018 and 2024 \| <br> \| Household debt ratio \|<br> \|:---\|:---\|:---\|<br> \| (percentage change, in real terms) \| <br> \| (per cent) \|<br> \| \| <br> \| \| |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp; Note: The consumption expenditure deflator was used to measure price trends.<br> Sources: Institut de la statistique du Québec, Statistics Canada and Ministère <br>des Finances du Québec. | Note: The debt ratio corresponds to the total value of liabilities divided by household disposable income.<br> Sources: Statistics Canada and Ministère des Finances du Québec. |

---

Budget 2026-2027 <br> E.22 Budget Plan

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![](exhibit99-12xu001.jpg)

**1.7 Despite a slowdown, activity in the residential sector will remain robust**

After growing by 14.5% between 2023 and 2025, residential investment in real terms is expected to grow slightly in 2026 (+0.3%), before declining in 2027. Nevertheless, activity in this sector will remain relatively robust.

- New construction will remain stable. After reaching 59 900 units in 2025, the number of housing starts is expected to be 56 000 units in 2026 and 49 000 units in 2027, levels higher than the average observed during the 10 years preceding the pandemic (44 200 units per year between 2010 and 2019).

- At the same time, demand in the resale market will remain strong, with transactions continuing to increase. They will be 99 400 in 2026 and 101 700 <br>in 2027. It should be noted that between 2010 and 2019, an average of <br>79 400 transactions were carried out each year.

This trend is explained by latent demand for housing, resulting from recent strong population growth, the fall in mortgage interest rates and by government measures aimed at increasing housing stock.

While housing supply will remain strong, the decline in population will limit demand. This trend will reduce imbalances in the housing market and ease the upward pressure on housing prices seen recently.

- The vacancy rate for rental housing, which rose from 1.8% in 2024 to 2.7% in 2025, indicates that the market is well on its way to rebalancing.

---

| | |
|:---|:---|
| CHART E.9 | CHART E.10 |
| **Residential investment in Québec** | **Rental vacancy rate in Québec** |
| (percentage change, in real terms) | (per cent) |
| ![](exhibit99-12xu077.jpg) | ![](exhibit99-12xu078.jpg) |
|  Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. | Note: This is the vacancy rate for rental housing for all centres with 10 000 inhabitants or more.<br> Source: Canada Mortgage and Housing Corporation. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.23

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![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **The Québec real estate market stands out from the rest of Canada** |
| &nbsp;&nbsp; The Québec real estate market has been standing out from the rest of Canada since 2024. In Québec, the number of housing starts is growing considerably. After a 25.2% gain in 2024, it jumped by 22.9% in 2025.<br> - This strength contrasts with a slowdown in several other provinces in 2025, notably British Columbia (-3.6%) and Ontario (-12.3%).<br> Québec's resale market also stands out for its dynamism. After a significant gain of 18.8% in 2024, the number of transactions in the resale market was up 7.7% in 2025. By comparison, the number of transactions was down in Ontario (-5.6% in 2025) and British Columbia (-5.7%).<br> The strength of housing starts in Québec was supported, in particular, by various government measures. In the context of a housing shortage, the Québec government, along with several municipalities, has implemented measures to encourage residential construction. Since fall 2018, nearly $4.3 billion has been invested in housing construction, mainly for social and affordable housing. This will make it possible to build nearly 25 500 affordable housing units from 2023-2024 to 2028-2029.<br> Furthermore, demand on the resale market in Québec has remained strong, with lower housing prices than those observed in Canada as a whole and a resilient job market.<br> - In 2025, the average price of a property was $541 700 in Québec, compared <br>to $834 800 in Ontario and $953 200 in British Columbia.<br> - In addition, Québec's labour market is one of the tightest in the country. More specifically, Québec ranked first among the provinces in terms of the employment rate for people aged 15 to 64 in 2025 (77.4% in Québec compared to 74.2% in Canada).<br> \| Housing starts and transactions on the resale market \| <br> \| Average home resale price \|<br> \|:---\|:---\|:---\|<br> \| (percentage change) \| <br> \| (thousands of dollars) \|<br> \| \| <br> \| \|<br> \| Sources: Canada Mortgage and Housing Corporation, Canadian Real Estate Association, Centris and Haver Analytics. \| <br> \| Sources: Canadian Real Estate Association, Centris and Haver Analytics. \|<br> \| <br> \| <br> \| <br> \| |

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Budget 2026-2027 <br> E.24 Budget Plan

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![](exhibit99-12xu001.jpg)

**1.8 The environment will once again be favourable for business investment starting in 2027**

Despite low financing costs, non-residential business investment is expected to decrease in 2026, in real terms.

- Geopolitical instability and the trade dispute will lead to the postponement, or even cancellation, of certain investment projects. The unpredictability surrounding U.S. trade policies makes it difficult for many businesses to plan for the long term.

- Investments in machinery and equipment, whose components are mainly imported, will be particularly affected. In addition, the relative weakness of the Canadian dollar will make them more expensive.

Starting in 2027, non-residential investment will resume its path of growth as uncertainty surrounding U.S. trade policy eases and export growth gets stronger.

Furthermore, investment in artificial intelligence is also expected to intensify, driven by digital transformation and the search for productivity gains.

In addition, despite the unstable trade environment, many large-scale projects are continuing, particularly in public transit and the mining sector.

- Also, Hydro-Québec's *Action Plan 2035 - Towards a Decarbonized and Prosperous Québec* includes massive investments by 2035.

---

| | |
|:---|:---|
| CHART E.11 | CHART E.12 |
| **Non-residential business investment in Québec** | **Components of non-residential business investment in Québec** |
| (percentage change, in real terms) | (percentage change, in real terms) |
| ![](exhibit99-12xu081.jpg) | ![](exhibit99-12xu082.jpg) |
|  Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. | Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.25

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![](exhibit99-12xu001.jpg)

**1.9 Government investment supports growth**

Governments are an important driver of economic activity in Québec. The value of government investment as a proportion of GDP was 4.4% in 2024, compared to 3.6% in Ontario.

- These investments, which include investments by the Québec government, the federal government, local public administrations and Aboriginal public administrations, are expected to reach a record $29.2 billion in 2027.

They will especially be driven by increased expenditures by the Québec government.

- In particular, investments set out in the Québec Infrastructure Plan (QIP) were increased by more than $5 billion over six years compared to what was planned in Budget 2025-2026.

- From 2025-2026 to 2030-2031, investments will total $108.0 billion, which is $5.2 billion more than what was planned in March 2025.

- The QIP was increased to $167 billion over 10 years, from 2026-2027 to 2035-2036.

- Significant amounts will be invested to preserve the quality of public services, ensure their continuity and guarantee their accessibility in the government's priority missions, namely health, social services, education and higher education.

CHART E.13

**Government investment in Québec**

(billions of dollars, in nominal terms)

![](exhibit99-12xu083.jpg)

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. <br>

Budget 2026-2027 <br> E.26 Budget Plan

------

![](exhibit99-12xu001.jpg)

**1.10 The external sector adjusts to the new trade environment**

Québec's exports in real terms fell by 1.7% in 2025. With the exception of 2020, which was affected by the pandemic, this is the first decline since 2011. The imposition of tariffs made Québec products more expensive for U.S. buyers, which reduced the volume of goods traded.

Exports will return to growth in 2026 and their progress will strengthen in 2027, as uncertainty eases and companies continue their efforts to increase exports outside the United States.

- In particular, after three consecutive years of decline, growth in exports to other provinces resumed in 2025 (+0.4%) and will accelerate to 1.8% in 2026 and 2.0% in 2027. The gradual reduction of barriers to domestic trade is a lever for stimulating these exports.

Québec's goods and services imports, for their part, will show a modest gain of 0.2% in 2026, before rising slightly in 2027 (+1.2%).

- The weakness of imports in 2026 is partly due to the drop in investment in machinery and equipment (-5.7%), whose components are mainly purchased from abroad. Additionally, trade tensions are prompting Québec businesses to become less dependent on U.S. imports.

---

| | |
|:---|:---|
| CHART E.14 | CHART E.15 |
| **Québec exports** | **Imports and domestic demand in Québec** |
| (percentage change, in real terms) | (percentage change, in real terms) |
| ![](exhibit99-12xu084.jpg) | ![](exhibit99-12xu085.jpg) |
|  Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. | Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.27

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **A sharp decline in exports to the United States** |
| &nbsp;&nbsp; Since March 2025, the U.S. administration has been applying tariffs to Canada on all imported products that do not comply with the provisions of the Canada-United States-Mexico Agreement (CUSMA). Trade barriers are also affecting several strategic sectors of Québec's and Canada's economies, including steel, aluminum, the automotive industry and lumber.<br> The implementation of these measures had an impact on Québec's trade. In the first 11 months of 2025, the not-seasonally adjusted value of international exports of goods decreased by $3.6 billion (-3.2%) compared to the same period in 2024.<br> - In particular, the value of exports to the United States fell by $6.5 billion (-7.9%) over this period. Among the products that contributed most to this decline were metal ores and non-metallic minerals (-24.3%), automobiles and parts (-20.4%), chemical, plastic and rubber products (-19.0%), and forestry products (-9.4%).<br> The unpredictability of U.S. trade policy creates a climate of uncertainty. Given these circumstances, exporters have adopted several strategies to mitigate the impact of tariffs, including diversifying their export markets.<br> - In the first 11 months of 2025, Québec's exports to destinations other than the United States increased by $2.9 billion (+9.8%).<br> - Despite increasing diversification, the United States remains Québec's main export market (an average of 70.0% of total international exports in 2025) and is expected to remain so due to its proximity and the strong integration of these two economies.<br> \| Québec's international exports of goods in 2025 \| <br> \| Québec's share of international exports of goods \|<br> \|:---\|:---\|:---\|<br> \| (change in billions of current dollars) \| <br> \| (per cent, current dollars) \|<br> \| \| <br> \| \|<br> \| <br> \| \| \| |

---

Budget 2026-2027 <br> E.28 Budget Plan

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![](exhibit99-12xu001.jpg)

**1.11 Inflation will stabilize around the Bank of Canada's target**

Although economic activity in Québec moderated in 2025, inflation as measured by CPI growth increased slightly, from 2.3% in 2024 to 2.4% in 2025. Despite some monthly volatility, it generally remained within the Bank of Canada's target range <br>of 1% to 3%.

- The imposition of tariffs on U.S. imports caused disruptions in some global supply chains and led to higher prices for several goods and services. Since a significant portion of consumer goods and input used by businesses come from the U.S. market, these tariffs directly increase import costs. In addition, the weakness of the Canadian dollar contributed to the higher cost of imported products.

- Nevertheless, the drop in oil prices has eased pressure on production and transportation costs.

Over the next few months, despite certain fluctuations, inflation is expected to remain close to the Bank of Canada's 2% target. In Québec, it is expected to average 2.3% in 2026 and 2.1% in 2027.

- For these two years, headline inflation in Québec is expected to be slightly higher than that expected for Canada (2.1% in 2026 and 2.1% in 2027). This trend is due in particular to housing costs, which should see faster growth than in Canada.

---

| | |
|:---|:---|
| CHART E.16 | CHART E.17 |
| **Total CPI** | **CPI excluding food and energy** |
| (percentage change) | (percentage change) |
| ![](exhibit99-12xu088.jpg) | ![](exhibit99-12xu089.jpg) |
| Sources: Statistics Canada and Ministère des Finances du Québec. | Sources: Statistics Canada and Ministère des Finances du Québec. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.29

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![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Slightly stronger inflation in Québec than in Canada** |
| &nbsp;&nbsp; After a period characterized by slower price increases in Québec than in Canada, the annual increase in the Consumer Price Index (CPI) in Québec is exceeding, since June 2025, the national level. In particular, in January 2026, annual CPI growth reached 3.0% in Québec, compared to 2.3% in Canada. This trend is notably due to:<br> - housing prices (+4.9% in January), which are rising faster than in Canada (+1.7%);<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ The housing market is slow in Canada, while it remains dynamic in Québec. In particular, the average price of a property on the resale market was up 8.1% <br>in 2025 in Québec, while it was down 1.5% for the same period in the country as a whole. Despite this increase, housing prices in Québec remain lower than in Canada.<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ Excluding housing, annual inflation stands at 2.2% in January in Québec, and 2.5% in Canada.<br> - energy prices, which fell by 5.4% in Québec in January compared to a 10.9% decline in Canada.<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ The removal of the federal fuel charge (carbon tax) for Canadian consumers, with the exception of Québec, on April 1, 2025, continues to impact annual inflation. <br>It should be noted that Québec has its own carbon pricing mechanism.<br> Over the next few months, annual inflation in Québec is expected to return to a rate comparable to that observed in Canada. The recovery in housing starts in Québec <br>since 2024, combined with a shrinking population, will contribute to easing pressures on housing prices. Moreover, the temporary effect on inflation in Canada that was brought about by the abolition of the carbon tax will dissipate starting in April 2026.<br> \| Trends in CPI \| <br> \| Trends in CPI excluding housing \|<br> \|:---\|:---\|:---\|<br> \| (annual percentage change) \| <br> \| (annual percentage change) \|<br> \| \| <br> \| \|<br> \| Source: Statistics Canada. \| <br> \| Source: Statistics Canada. \| |

---

Budget 2026-2027 <br> E.30 Budget Plan

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **The imbalance in the housing market will quickly fade,** <br>**easing pressure on prices** |
| &nbsp;&nbsp; In general, housing starts grow at a rate comparable to that of household formation<sup>1</sup>, the latter being a major determinant of housing demand.<br> In 2023 and 2024, population growth accelerated in Québec, which contributed to a faster pace of household formation. Approximately 72 900 new households were formed in 2023, followed by an additional 81 300 households in 2024.<br> At the same time, housing starts reached a low point in 2023 (38 900 units), hampered by rising interest rates and high construction costs, in particular. They then went back up to 48 700 units in 2024, a rate that remained insufficient, however, to meet demand. This imbalance between supply and demand put upward pressure on housing prices.<br> In 2025, there were 59 900 housing starts, which was significantly higher than the number of households formed (34 700). This gap marks the beginning of a rebalancing of the housing market. The increased vacancy rate for rental housing, which rose <br>from 1.8% in 2024 to 2.7% in 2025, confirms that the adjustment is well under way.<br> The momentum in residential construction will continue from 2026 to 2028, with housing starts expected to exceed 40 000 units per year. At the same time, household formation is expected to slow due to the anticipated decline in population. This trend will slow demand for housing in a context where supply will continue to increase, which is expected to translate into a moderation in price growth.<br> - In addition, Québec's Administrative Housing Tribunal has proposed a 3.1% rent increase in 2026 for units that have not undergone any major renovations. This increase is well below that proposed for 2025 (+5.9%).<br> **Changes in housing starts and household formation in Québec**<br> (thousands)<br> ![](exhibit99-12xu092.jpg)<br> Sources: Institut de la statistique du Québec, Canada Mortgage and Housing Corporation and Ministère des Finances du Québec. |
|  1 Household formation refers to the number of new private households, plus an estimate of new collective households formed, in particular, by people living in seniors' residences. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.31

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![](exhibit99-12xu001.jpg)

**1.12 Nominal GDP growth will decelerate**

After posting strong increases since 2021, nominal GDP, the broadest measure of the tax base and a central determinant of the change in the government's <br>own-source revenue, should post more moderate gains, up 3.5% in 2026 and 3.4% in 2027.

- This is largely due to the deceleration in GDP price growth.

- Growth in output value over the next two years will be slightly lower than the average observed over the ten years preceding the pandemic (an average <br>of +3.8% annually from 2010 to 2019).

While the main tax bases on which government revenues are based will generally increase, their growth will slow down.

- Growth in wages and salaries will slow significantly between 2025 (+4.4%) and 2026 (+3.0%), as the growth seen in 2025 was stimulated more significantly than it will be in 2026 by retroactive salary payments granted to public and parapublic sector employees. In 2027, the tighter labour pool resulting from the anticipated population decline will increase tensions in the labour market, exerting modest pressure on wages and salaries, which are expected to grow by 3.5%.

- Growth in consumer spending in nominal terms is expected to slow from 4.0% in 2025 to 3.8% in 2026 and 3.6% in 2027 due to moderating inflation and population decline.

- Despite the persistent climate of uncertainty, businesses managed to maintain an increase in their profits in 2025 (+5.7%). The net operating surplus of corporations is expected to increase by 3.7% in 2026 and 3.1% in 2027.

- This trend reflects businesses' ability to adapt to rising costs, particularly through price adjustments and productivity gains. It also reflects the strong domestic demand.

- However, this growth rate is lower than the average annual growth observed over the ten years preceding the pandemic (+4.2% on average from 2010 <br>to 2019).

TABLE E.6

**Nominal GDP in Québec**

(percentage change) <br>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2024** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;Real GDP | 1.7 | 0.8 | 1.1 | 1.4 |
| &nbsp;&nbsp;Prices - GDP deflator | 4.1 | 3.7 | 2.3 | 2.0 |
| &nbsp;&nbsp;**NOMINAL GDP** | **5.9** | **4.5** | **3.5** | **3.4** |

---

Note: Totals may not add due to rounding.

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. <br>

Budget 2026-2027 <br> E.32 Budget Plan

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![](exhibit99-12xu001.jpg)

**1.13 Forecasts comparable to those of the private sector**

The Ministère des Finances du Québec forecasts a 1.1% increase in economic activity in 2026. This increase is similar to the average private sector forecast (+1.0%).

The Ministère des Finances is forecasting 1.4% real GDP growth in 2027. This is slightly more cautious growth than the average private sector forecast (+1.6%).

The large variation between private sector forecasts reflects the uncertainty arising from the current economic situation.

---

| | |
|:---|:---|
| CHART E.18 | CHART E.19 |
| **Economic growth in Québec in 2026** | **Economic growth in Québec in 2027** |
| (real GDP, percentage change) | (real GDP, percentage change) |
| ![](exhibit99-12xu094.jpg) | ![](exhibit99-12xu095.jpg) |
|  Source: MFQ summary as at March 9, 2026, which includes the forecasts of ten private sector institutions. | Source: MFQ summary as at March 9, 2026, which includes the forecasts of ten private sector institutions. |

---

TABLE E.7

**Economic outlook in Québec - Comparison with the private sector**

(annual percentage change)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** | **Average**<br>**2026-2030** |
| &nbsp;&nbsp;**Real GDP** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Ministère des Finances du Québec | 0.8 | 1.1 | 1.4 | 1.5 | 1.5 | 1.4 | 1.4 |
| &nbsp;&nbsp;Private sector average | 0.9 | 1 | 1.6 | 1.5 | 1.5 | 1.5 | 1.4 |
| &nbsp;&nbsp;**Nominal GDP** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Ministère des Finances du Québec | 4.5 | 3.5 | 3.4 | 3.4 | 3.4 | 3.3 | 3.4 |
| &nbsp;&nbsp;Private sector average | 4.3 | 3.4 | 3.7 | 3.6 | 3.6 | 3.6 | 3.6 |

---

Note: Averages may not add due to rounding.

Source: Ministère des Finances du Québec summary, as at March 9, 2026, which includes the forecasts of ten private sector institutions. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.33

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![](exhibit99-12xu001.jpg)

TABLE E.8

**Economic outlook in Québec**

(annual average, percentage change, unless otherwise indicated)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2024** | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** |
| &nbsp;&nbsp;**Production** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Real GDP | 1.7 | 0.8 | 1.1 | 1.4 | 1.5 | 1.5 | 1.4 |
| &nbsp;&nbsp;Nominal GDP | 5.9 | 4.5 | 3.5 | 3.4 | 3.4 | 3.4 | 3.3 |
| &nbsp;&nbsp;Nominal GDP (billions of dollars) | 616.8 | 644.4 | 666.9 | 689.9 | 713.6 | 737.7 | 762.4 |
| &nbsp;&nbsp;**Components of GDP** (in real terms) |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Final domestic demand | 3.1 | 1.8 | 0.7 | 1 | 1 | 1.1 | 1.1 |
| &nbsp;&nbsp;- Household consumption | 2.5 | 1.1 | 1.3 | 1.6 | 1.5 | 1.5 | 1.4 |
| &nbsp;&nbsp;- Government spending and investment | 2.5 | 1.4 | 0.1 | 0.1 | 0.3 | 0.6 | 0.9 |
| &nbsp;&nbsp;- Residential investment | 5.9 | 8.1 | 0.3 | -1.2 | -2.8 | -2.5 | -1.6 |
| &nbsp;&nbsp;- Non-residential business investment | 5.5 | 1.5 | -0.7 | 1.7 | 2.5 | 2.3 | 2.3 |
| &nbsp;&nbsp;Exports | 0.5 | -1.7 | 1.2 | 2.2 | 2 | 2 | 1.9 |
| &nbsp;&nbsp;Imports | 1.8 | 1.4 | 0.2 | 1.2 | 1.2 | 1.2 | 1.2 |
| &nbsp;&nbsp;**Labour market** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Population (thousands) | 8 995 | 9 058 | 9 045 | 9 025 | 9 012 | 9 007 | 9 014 |
| &nbsp;&nbsp;Population aged 15 and over - Labour Force Survey (thousands) | 7 435 | 7 579 | 7 601 | 7 597 | 7 596 | 7 606 | 7 623 |
| &nbsp;&nbsp;Jobs (thousands) | 4 566 | 4 645 | 4 665 | 4 681 | 4 698 | 4 713 | 4 727 |
| &nbsp;&nbsp;Job creation (thousands) | 43.2 | 78.8 | 20.4 | 16.1 | 16.3 | 15.3 | 14 |
| &nbsp;&nbsp;Unemployment rate (per cent) | 5.3 | 5.6 | 5.4 | 4.6 | 4.2 | 4 | 4 |
| &nbsp;&nbsp;**Other economic indicators** (in nominal terms) |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Household consumption | 5.1 | 4 | 3.8 | 3.6 | 3.4 | 3.3 | 3.2 |
| &nbsp;&nbsp;- Excluding food expenditures and shelter | 4.1 | 2.6 | 2.7 | 3.3 | 3.2 | 3.1 | 3 |
| &nbsp;&nbsp;Housing starts (thousands of units) | 48.7 | 59.9 | 56 | 49 | 41.5 | 36.9 | 33.9 |
| &nbsp;&nbsp;Residential investment | 9.4 | 14.2 | 3.4 | 1.2 | -0.3 | -0.2 | 0.8 |
| &nbsp;&nbsp;Non-residential business investment | 9.2 | 5.4 | 2.1 | 4.2 | 5.1 | 4.5 | 4.5 |
| &nbsp;&nbsp;Wages and salaries | 6 | 4.4 | 3 | 3.5 | 3.3 | 3.1 | 3.1 |
| &nbsp;&nbsp;Household income | 7.1 | 3.8 | 3.2 | 3.4 | 3.3 | 3.2 | 3.3 |
| &nbsp;&nbsp;Net operating surplus of corporations | 3.1 | 5.7 | 3.7 | 3.1 | 3.4 | 3.6 | 3.7 |
| &nbsp;&nbsp;Consumer Price Index | 2.3 | 2.4 | 2.3 | 2.1 | 2 | 2 | 2 |
| &nbsp;&nbsp;- Excluding food and energy | 2.7 | 2.7 | 2.3 | 2.1 | 1.9 | 1.9 | 1.9 |

---

Sources: Institut de la statistique du Québec, Statistics Canada, Canada Mortgage and Housing Corporation and Ministère des Finances du Québec.

Budget 2026-2027 <br> E.34 Budget Plan

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![](exhibit99-12xu001.jpg)

**2. THE SITUATION OF QUÉBEC'S MAIN ECONOMIC PARTNERS**

Québec is an economy open to the world. In 2024, total exports accounted for over 45% of Québec's nominal GDP. Consequently, growth trends in Québec, particularly in exports, are largely influenced by the economic position of its main trading partners.

Although its trade destinations have diversified over the past 20 years, Canada and the United States remain Québec's main economic partners.

- In 2024, more than 26% of all Québec merchandise exports were destined for Canada, whereas those to the United States represented slightly less than 54%.

In the current climate of uncertainty, Québec remains highly dependent on the trade policy of its main international partner, which increases its vulnerability to external fluctuations.

CHART E.20

**Share of Québec's merchandise exports by main trading partner**

(percentage of total merchandise exports, in nominal terms)

![](exhibit99-12xu096.jpg)

Note: Merchandise exports include international and interprovincial merchandise exports.

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.35

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![](exhibit99-12xu001.jpg)

**2.1 The economic situation in Canada**

❏ **The Canadian economy at a turning point in 2026**

The Canadian economy remained relatively strong in 2025 (+1.7%). At the beginning of the year, U.S. companies stepped up their imports before the imposition of tariffs, which temporarily boosted trade. In addition, favourable financial conditions, driven by further cuts to policy rates and strong stock markets, helped to bolster domestic demand and sustain economic activity.

These favourable conditions are, however, gradually fading as the Canadian economy faces several headwinds. Overall, real GDP growth is expected to slow <br>to 1.1% in 2026.

- U.S. trade and tariff policies continue to harm exporters, particularly in certain sectors, including steel, aluminum, automobile manufacturing and wood products. At the same time, persistent threats of higher tariffs combined with the uncertain outcome of the CUSMA negotiations are weakening the economic outlook, particularly by limiting non-residential investment.

- Furthermore, the federal government, in collaboration with all provinces and territories, is stepping up efforts to establish new trade partnerships to support market diversification and growth in the external sector.

- The federal government is also pursuing its goal of reducing the proportion of non-permanent residents in the population to 5.0% by the end of 2027.

As the Canadian economy adapts to the new trade environment, growth is expected to accelerate and rise to 1.6% in 2027.

CHART E.21

**Economic growth in Canada**

(real GDP, percentage change)

![](exhibit99-12xu097.jpg)

Sources: Statistics Canada and Ministère des Finances du Québec.<br>

Budget 2026-2027 <br> E.36 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **Domestic demand will support economic growth**

Real GDP growth will decelerate from 1.7% in 2025 to 1.1% in 2026.

- Household consumption is expected to remain strong, supported by relatively low interest rates, but growth in consumer spending will slow, curbed in particular by population stabilization (0.0%).

- The residential market is expected to continue growing in 2026, supported by improved affordability conditions, the cumulative decline in the Bank of Canada's policy rate and the resilience of the labour market.

- The trade dispute and resulting uncertainty will temper non-residential investment.

The external sector, for its part, will contribute modestly to the rise in real GDP.

- Exports will show weak growth (+0.5%), while tariffs introduced by the United States will continue to raise the cost of exported goods, dampening demand for Canadian products.

- Meanwhile, imports will remain relatively stable (+0.1%) due, in part, to lower investment in machinery and equipment, whose components are mainly imported.

In 2027, the recovery in non-residential business investment and exports, supported by reduced uncertainty, will result in a stronger recovery in economic activity.

TABLE E.9

**Real GDP and its major components in Canada**

(percentage change and contribution in percentage points)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Change** | **Change** | **Change** | **Contribution** | **Contribution** | **Contribution** |
| | **2025** | **2026** | **2027** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;**Domestic demand** | **2.1** | **1.1** | **1.4** | **2.2** | **1.1** | **1.5** |
| &nbsp;&nbsp;Household consumption | 2.3 | 1.6 | 1.8 | 1.3 | 0.9 | 1 |
| &nbsp;&nbsp;Residential investment | 1 | 2.5 | 0.6 | 0.1 | 0.2 | 0 |
| &nbsp;&nbsp;Non-residential business investment | -0.2 | -1.4 | 1.7 | 0 | -0.2 | 0.2 |
| &nbsp;&nbsp;Government spending and investment | 3 | 0.8 | 0.7 | 0.8 | 0.2 | 0.2 |
| &nbsp;&nbsp;**External sector** | **-** | **-** | **-** | **-0.4** | **0.1** | **0.2** |
| &nbsp;&nbsp;Exports | -1.7 | 0.5 | 2.2 | -0.5 | 0.1 | 0.7 |
| &nbsp;&nbsp;Imports | -0.4 | 0.1 | 1.3 | 0.1 | 0 | -0.4 |
| &nbsp;&nbsp;**Inventories** | **-** | **-** | **-** | **0.0** | **-0.2** | **-0.1** |
| &nbsp;&nbsp;**REAL GDP** | **1.7** | **1.1** | **1.6** | **1.7** | **1.1** | **1.6** |

---

Note: Totals may not add due to rounding.

Sources: Statistics Canada and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.37

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![](exhibit99-12xu001.jpg)

❏ **Population stagnation will dampen job creation**

Over the next few years, the relative stagnation of the population will dampen job creation.

- After an average gain of 298 200 jobs in 2025 (+1.4%), only 113 800 jobs are expected to be created in 2026 (+0.5%) and another 140 900 in 2027 (+0.7%). The expected stagnation in the labour pool will contribute to a decline in the unemployment rate, which will fall from 6.8% in 2025 to 6.5% in 2026 and 5.7% in 2027.

❏ **Household consumption will support growth**

Despite a certain slowdown due to population stabilization, household consumption will remain the main driver of economic activity.

- It will be supported, in particular, by lower interest rates and various measures taken by the federal government, such as tax relief and the enhancement of the Canada Groceries and Essentials Benefit, as well as by some provincial governments to bolster household expenditures.

❏ **Residential investment will continue to grow**

Despite disparities between provinces, residential investment in Canada returned to growth in 2025 (+1.0%) and is expected to continue to grow in 2026. It will be supported by accumulated demand and improved affordability conditions, including lower mortgage rates and prices, particularly in Ontario and Vancouver. In 2027, momentum in this sector is expected to slow, curbed in part by a declining demand for housing.

---

| | |
|:---|:---|
| CHART E.22 | CHART E.23 |
| **Household consumption expenditure in Canada** | **Residential investment in Canada** |
| (percentage change, in real terms) | (percentage change, in real terms) |
| ![](exhibit99-12xu098.jpg) | ![](exhibit99-12xu099.jpg) |
|  Sources: Statistics Canada and Ministère des Finances du Québec. | Sources: Statistics Canada and Ministère des Finances du Québec. |

---

Budget 2026-2027 <br> E.38 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **Investments will return to growth in 2027**

In 2026, non-residential business investment will decline for a third consecutive year (-1.4%), before returning to growth in 2027 (+1.7%).

- Uncertainty surrounding the trade dispute will lead to the postponement or even cancellation of certain projects. In addition, businesses have less cash to invest, as the net operating surplus of corporations fell 13.8% between 2022 and 2024, which limited investments.

- However, Canada's new defence policy, aligned with its NATO commitments, will help support these investments.

❏ **Export growth will pick up despite uncertainty**

In 2026, exports will pick up slightly (+0.5%), and their growth will accelerate in 2027 (+2.2%).

Despite the persistence of tariffs, exports will benefit from the relative weakness of the Canadian dollar. Furthermore, companies are gradually diversifying their export markets. In addition, liquefied natural gas export capacity will continue to increase <br>in 2026, which will support sales of energy products abroad.

Imports, meanwhile, are expected to grow modestly in 2026 (+0.1%) and post a 1.3% gain in 2027. They will be driven by a strong increase in domestic demand in particular. However, imports will be held back by factors such as population stagnation and weak investment in machinery and equipment.

---

| | |
|:---|:---|
| CHART E.24 | CHART E.25 |
| **Non-residential business investment in Canada** | **Exports and imports in Canada** |
| (percentage change, in real terms) | (percentage change, in real terms) |
| ![](exhibit99-12xu100.jpg) | ![](exhibit99-12xu101.jpg) |
|  Sources: Statistics Canada and Ministère des Finances du Québec. | Sources: Statistics Canada and Ministère des Finances du Québec. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.39

------

![](exhibit99-12xu001.jpg)

**2.2 The economic situation in the United States**

❏ **Relatively robust economic growth in 2026**

Real GDP in the United States is expected to grow by 2.3% in 2026 after increasing by 2.2% in 2025. Growth should then return closer to its potential, settling at 1.9% <br>in 2027.

Economic activity, which showed surprising resilience in 2025 despite numerous headwinds, will benefit from domestic demand over the next two years. It will be supported in particular by:

- an expansionary fiscal policy resulting from the adoption in 2025 of the *One Big Beautiful Bill Act* (OBBBA), whose effects on growth will be felt more strongly <br>in 2026;

- easing of financial conditions, as the U.S. Federal Reserve will continue to cut its key interest rate this year amid a slowdown in the labour market, even though inflation will remain above the 2% target;

- significant investments in artificial intelligence (AI) and digital technology, which should lead to improved productivity. However, the enthusiasm surrounding AI in financial markets raises the risk that markets may overestimate the speed and scale of expected benefits.

Furthermore, certain factors will limit the growth of the U.S. economy, namely geopolitical and trade tensions, and restrictive migration policies that could further limit the supply of workers and fuel inflation.

CHART E.26

**Economic growth in the United States**

(real GDP, percentage change)

![](exhibit99-12xu102.jpg)<br>

Sources: S&P Global and Ministère des Finances du Québec.

Budget 2026-2027 <br> E.40 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **Consumer spending will remain high**

Following 2.7% growth in 2025, household consumption expenditure is forecast to increase by 2.4% in 2026 and 2.2% in 2027.

- U.S. household spending will be supported by improved financial wealth and the massive fiscal stimulus plan of 2025.

- However, it will be limited by somewhat high inflation (2.6% in 2026 and 2.4% in 2027), by the slowdown in job creation, which will fall from an average of approximately 120 000 jobs per month in 2024 to an average of 35 000 jobs per month from 2025 to 2027, and by fragile consumer confidence.

❏ **The real estate sector is expected to rebound in 2027**

Residential investment will decline slightly in 2026 (-0.9%) before rebounding in 2027 (+2.1%). It had contracted by 2.2% in 2025.

- The labour shortage caused in particular by restrictive migration policies will dampen residential investment.

- Furthermore, with the decline in net immigration, the pace of household formation is also expected to slow, which, combined with the slowing labour market, will limit housing demand and housing starts.

Nevertheless, the expected continued decrease in mortgage rates and more moderate real estate prices will improve housing affordability and promote a recovery in the residential market in 2027.

---

| | |
|:---|:---|
| CHART E.27 | CHART E.28 |
| **Confidence indices in the United States** | **Growth in real estate prices and mortgage rates in the United States** |
| (indices, three-month moving average) | (per cent) |
| ![](exhibit99-12xu103.jpg) | ![](exhibit99-12xu104.jpg) |
|  Note: The base year (100) is 1985 for the consumer confidence index and 1986 for the business confidence index.<br> Source: S&P Global. | Sources: S&P Global, Bloomberg and Ministère des Finances du Québec. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.41

------

![](exhibit99-12xu001.jpg)

❏ **Artificial intelligence, a driver of business investment**

Non-residential business investment is expected to increase by 2.5% in 2026 and 2.1% in 2027, after growing strongly by 4.2% in 2025.

It will continue to grow, mainly driven by the rise of AI, which will remain a driver of business capital expenditures after encouraging the digital shift in the years following the pandemic.

- Investments in AI will remain at the forefront in 2026, and could exceed US$500 billion, according to some experts. Computer purchases, data centre construction and investments in intellectual property products, such as research and development, will remain strong.

- The significant tax measures in the OBBBA, such as accelerated deductions for certain eligible capital expenditures, will support business investment. This will also be the case for the decrease in corporate financing costs resulting from monetary policy easing.

The strong rise in investment will nevertheless slow as the positive effects of the OBBBA fade.

- Added to this is somewhat high inflation, fuelled in particular by tariffs and electricity costs, as well as a labour shortage.

---

| | |
|:---|:---|
| CHART E.29 | CHART E.30 |
| **Non-residential business investment in the United States** | **Average price of electricity in the United States** |
| (index, first quarter of 2015 = 100, in real terms) | (in U.S. cents per kWh) |
| ![](exhibit99-12xu105.jpg) | ![](exhibit99-12xu106.jpg) |
|  (1) Investments in computer equipment, research and development and software.<br> Sources: S&P Global and Ministère des Finances du Québec. | Source: U.S. Energy Information Administration. |

---

Budget 2026-2027 <br> E.42 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **An expansionary fiscal policy** 

After growing by 1.2% in 2025, spending by all levels of government is expected to slow significantly, increasing by 0.6% in 2026 and 0.4% in 2027.

- Growth in federal government spending will slow from 1.6% in 2026 to 0.4% in 2027, while state and local government spending will remain relatively stable.

Despite weak discretionary expenditures in real terms, the budgetary deficit and public debt will rise due to the fiscal stimulus plan. Furthermore, tariff revenue growth could be slower following the Supreme Court's decision to strike down a large portion of the tariffs.

❏ **The external sector influenced by trade policy** 

Exports will grow by 1.8% in 2026 and 2.1% in 2027, benefiting from global demand and the depreciation of the U.S. dollar.

In addition, high tariffs, which have increased the cost of imported goods, will result in a 0.5% decline in imports in 2026. However, imports will return to growth in 2027 (+2.6%), underpinned by domestic demand, including business investment.

Overall, net exports will contribute 0.2 percentage points to real GDP growth. Trade policy will continue to affect exchanges between the United States and its trading partners, while investments in AI, among other things, will keep the trade deficit at a high level.

---

| | |
|:---|:---|
| CHART E.31 | CHART E.32 |
| **Government spending in the United States** | **Goods trade deficit in the United States** |
| (percentage change, in real terms) | (billions of U.S. dollars) |
| ![](exhibit99-12xu107.jpg) | ![](exhibit99-12xu108.jpg) |
|  Sources: S&P Global and Ministère des Finances du Québec. | Source: S&P Global. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.43

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Growth supported by a generous fiscal stimulus plan** |
| &nbsp;&nbsp;&nbsp; On July 4, 2025, the U.S. government passed the *One Big Beautiful Bill Act*, or OBBBA. This new law made permanent a number of tax measures adopted during the 2017 tax reform, which were due to expire at the end of 2025.<br> It also introduced new measures that change taxation for households and businesses, the structure of certain tax credits and the financing and delivery of several social programs. Among other things, the OBBBA:<br> - makes permanent the 2017 changes to tax rates and brackets and extends inflation indexation by one year for the 10%, 12% and 22% tax brackets;<br> - accelerates deductions for business investments (accelerated depreciation), reducing the effective marginal tax rate on these capital expenditures;<br> - increases public expenditures in sectors deemed to be priorities, such as defence and security, while reducing other types of discretionary expenditures.<br> According to the Congressional Budget Office (CBO), a nonpartisan agency of the United States Congress, the medium- and long-term impacts of the OBBBA are uncertain.<br> - It should stimulate growth in the short term but will widen inequalities between households and worsen public finances.<br> **Support for growth in the coming years**<br> The CBO estimates that the new law will raise real GDP by 0.4% in 2025, 0.9% in 2026 and 0.7% on average per year from 2027 to 2034.<br> In the short term, the gains will come from increased demand for goods and services. In the long term, they will result from an increase in the number of hours worked and investment.<br> \| Effects of the OBBBA on household income \| <br> \| Macroeconomic impacts of the OBBBA \|<br> \|:---\|:---\|:---\|<br> \| (thousands of U.S. dollars; 2026-2034) \| <br> \| (percentage points, unless otherwise indicated) \|<br> \| \| <br> \| \|<br> \| Source: Congressional Budget Office. \| <br> \| Source: Congressional Budget Office. \| |

---

Budget 2026-2027 <br> E.44 Budget Plan

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Growth supported by a generous fiscal stimulus plan (cont.)** |
| &nbsp;&nbsp; **A significant source of inequality within the U.S. economy**<br> This generous fiscal stimulus plan will fuel inflation somewhat by boosting demand. <br>In addition, it will widen the income gap between wealthier households and low-income households.<br> - High-income households will be the main beneficiaries, while low-income households will lose out due to reduced social transfers from the federal government and states.<br> Against this backdrop, several experts believe that the OBBBA could exacerbate the <br>K-shaped economy phenomenon previously observed, in particular in 2025. This concept expresses a two-speed recovery where one part of the economy accelerates (the upper arm of the K), while others stagnate or decline (the lower arm).<br> - For example, in 2025, income and asset growth were exceptionally strong for wealthier households, but more modest for less affluent ones.<br> - As a result, the wealthiest 40% of households accounted for approximately 60% of consumption in the United States.<br> - In addition, investments in certain sectors such as artificial intelligence have increased significantly, to the detriment of investments in other sectors.<br> **A significant increase in the deficit and public debt**<br> The CBO anticipates upward pressure on public debt and debt service in the medium term, which will alter the United States' already precarious fiscal trajectory.<br> - The measures outlined in the OBBBA will reduce federal revenue by nearly US$4 500 billion by 2034 and public spending by approximately US$1 100 billion. Accordingly, they will increase the deficit by US$4 200 billion. The debt ratio will <br>reach 108% of GDP in 2030, exceeding its 1946 peak, and 116% in 2034. <br> **Budgetary deficit and government debt in the United States**<br> (percentage of GDP)<br> Source: Congressional Budget Office. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.45

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![](exhibit99-12xu001.jpg)

 **3. THE GLOBAL ECONOMIC SITUATION**

❏ **The global economy is proving resilient**

Global real GDP growth was 3.4% in 2025 and is expected to slow slightly to 3.2% in 2026 and 2027. The global economy is nevertheless showing resilience in an international context that remains marked by numerous disruptions and the resulting uncertainty.

- The slowdown expected in 2026 will be reflected in the growth of several advanced and emerging economies.

The high tariffs imposed by the United States on imports since spring 2025 are hindering global economic growth and leading to increased trade volatility. The effects of tariffs are amplified by the high uncertainty weighing on business confidence and limiting investment.

Agreements between the United States and its trading partners have nevertheless led to a reduction in some tariffs, and many countries are gradually adjusting to this new reality. In addition, moderate inflation, more accommodative financial conditions and expansionary budgetary policies in several major advanced economies will continue to buoy economic activity.

However, numerous vulnerabilities could slow growth in some countries in the coming years. These include worsening geopolitical tensions and a possible deterioration in public finances, which could lead governments to limit their spending.

CHART E.33

**Global economic growth**

(real GDP in purchasing power parity, percentage change)

![](exhibit99-12xu112.jpg)

Sources: International Monetary Fund, S&P Global, LSEG Datastream, Bloomberg, Eurostat and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.47

------

![](exhibit99-12xu001.jpg)

TABLE E.10<br>**Outlook for global economic growth**

(real GDP, annual percentage change)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Weight<sup>(1)</sup>** | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;**World<sup>(2)</sup>** | **100.0** | **3.4** | **3.2** | **3.2** |
| &nbsp;&nbsp;**Advanced economies<sup>(2)</sup>** | **39.8** | **1.9** | **1.7** | **1.6** |
| &nbsp;&nbsp;Québec | 0.3 | 0.8 | 1.1 | 1.4 |
| &nbsp;&nbsp;Canada | 1.3 | 1.7 | 1.1 | 1.6 |
| &nbsp;&nbsp;United States | 14.8 | 2.2 | 2.3 | 1.9 |
| &nbsp;&nbsp;Euro area | 11.7 | 1.4 | 1.1 | 1.4 |
| &nbsp;&nbsp;- Germany | 3 | 0.2 | 0.8 | 1.3 |
| &nbsp;&nbsp;- France | 2.2 | 0.8 | 0.9 | 1 |
| &nbsp;&nbsp;- Italy | 1.8 | 0.5 | 0.6 | 0.8 |
| &nbsp;&nbsp;United Kingdom | 2.2 | 1.3 | 1.1 | 1.2 |
| &nbsp;&nbsp;Japan | 3.3 | 1.1 | 0.8 | 0.8 |
| &nbsp;&nbsp;**Emerging and developing economies<sup>(2)</sup>** | **60.2** | **4.4** | **4.2** | **4.2** |
| &nbsp;&nbsp;China | 19.3 | 5 | 4.5 | 4.2 |
| &nbsp;&nbsp;India<sup>(3)</sup> | 8.1 | 7.2 | 6.5 | 6.5 |

---

(1) Economic weight according to purchasing power parity. The weights shown are for the year 2024.

(2) GDP in purchasing power parity.

(3) Data for the fiscal year (April 1 to March 31).

Sources: International Monetary Fund, S&P Global, Institut de la statistique du Québec, Statistics Canada, Bloomberg, LSEG Datastream, Eurostat and Ministère des Finances du Québec. <br>

Budget 2026-2027 <br> E.48 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **Growth slowdown in advanced economies**

Real GDP growth in advanced economies is expected to moderate to 1.7%, on average, in 2026 and 1.6% in 2027, compared to 1.9% in 2025. However, the <br>United States will continue to experience strong economic growth in 2026.

- Economic growth is expected to moderate in 2026 in several advanced economies, including Canada, the euro area and Japan.

In some countries, such as the United States and the United Kingdom, monetary easing could continue in 2026, which would support economic activity.

In addition, fiscal expansion in the United States, Germany and Japan, among others, will also have a positive effect on growth, but the resulting deterioration in public finances remains a significant risk in the longer term.

U.S. tariffs will continue to hamper economic growth in advanced economies, but their impact could ease in the medium term. Furthermore, many Asian economies, such as Japan, South Korea and Taiwan, are capitalizing on strong demand, particularly from the U.S., for their exports in the technology sector.

- The euro area, meanwhile, appears to be benefiting less from the boom in the technology sector, and its manufacturing sector continues to be weighed down by high energy costs and foreign competition.

---

| | |
|:---|:---|
| CHART E.34 | CHART E.35 |
| **Economic growth in select major advanced economies** | **Primary budgetary balance in select major advanced economies** |
| (real GDP, percentage change) | (percentage of GDP) |
| ![](exhibit99-12xu113.jpg) | ![](exhibit99-12xu114.jpg) |
|  Sources: International Monetary Fund, S&P Global, LSEG Datastream, Bloomberg, Eurostat and Ministère des Finances du Québec. | Note: Budgetary balance excluding interest payments, adjusted for cyclical economic variations and expressed as a percentage of potential GDP.<br> Source: International Monetary Fund. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.49

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **A worldwide deterioration of public finances** |
| &nbsp;&nbsp; According to the International Monetary Fund (IMF), global public debt is projected to increase, rising from 94.7% of GDP in 2025 to 101.1% in 2029. This would put it at its highest level since 1948. In the past year, the IMF has adjusted its forecast for global public debt in 2029 upward by 2.4 percentage points and believes that there is a risk of an even greater increase.<br> - The deterioration in public finances is occurring against a backdrop of moderate economic growth and rising borrowing costs for governments, following a period of low interest rates. Governments are also facing upward pressure on their spending.<br> &nbsp;&nbsp;&nbsp;&nbsp;▪ Among other things, NATO countries, including Canada, have agreed to significantly increase their military spending. Population aging in advanced economies is also putting pressure on public finances.<br> Some major economies, such as those of the United States, the United Kingdom and France, are in a budgetary situation that is difficult to sustain over the long term and are facing high interest payments. Furthermore, public debt exceeds 100% of GDP in most G7 economies. <br> This deterioration in public finances in several major economies is one of the factors that could exert upward pressure on long-term interest rates, thereby increasing debt service costs and worsening public finances in many countries.<br> - In addition, developments in these areas could pose a significant risk to the economic situation and the long-term stability of the global financial system. For instance, precarious public finances could limit the leeway of governments to intervene in the event of a negative economic shock.<br> \| Outlook for public finances worldwide \| <br> \| Budgetary balance in select G7 economies \|<br> \|:---\|:---\|:---\|<br> \| (percentage of GDP) \| <br> \| (percentage of GDP) \|<br> \| \| <br> \| \|<br> \| Note: The primary public deficit excludes net interest payments.<br>Source: International Monetary Fund. \| <br> \| Note: Budgetary balance for all public administrations, including public pension plans.<br>Source: International Monetary Fund. \| |

---

Budget 2026-2027 <br> E.50 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **Dampening of growth in emerging economies**

Real GDP growth in emerging economies is expected to be 4.4% in 2025 and 4.2% in 2026 and 2027. Growth will slow in 2026 compared to 2025, particularly in China and India, the two largest emerging economies.

- Overall, economic growth in emerging economies will be supported by the easing of trade tensions and adjustment to this new reality, stabilization of commodity prices, improved financial conditions and strengthened investment flows.

In China, the country hardest hit by U.S. tariffs, real GDP growth is expected to slow gradually, from 5.0% in 2025 to 4.5% in 2026, and then to 4.2% in 2027.

- Weak domestic demand, high tariffs on exports to the United States, difficulties in the real estate sector and a less expansionary budgetary policy are weighing on growth.

- Other structural challenges, such as the weak labour market and an aging population, are also curbing economic activity.

- However, Chinese authorities continue to support economic growth, and, in recent months, the country has managed to diversify its export markets, thereby limiting the impact of U.S. tariffs.

---

| | |
|:---|:---|
| CHART E.36 | CHART E.37 |
| **Economic growth in select major emerging economies** | **World Bank's financial conditions index** |
| (real GDP, percentage change) | (index in points, January 2024 = 100) |
| ![](exhibit99-12xu117.jpg) | ![](exhibit99-12xu118.jpg) |
|  Sources: International Monetary Fund, S&P Global, LSEG Datastream, Bloomberg and Ministère des Finances du Québec. | Note: A lower value indicates more flexible financial conditions.<br> Source: World Bank. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.51

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Global trade is experiencing disruptions** |
| &nbsp;&nbsp; In recent years, international trade has been disrupted by several events, including the COVID-19 pandemic, the war in Ukraine and the conflicts in the Middle East, as well as by the resulting significant disruptions in supply chains.<br> - Furthermore, in 2025, the United States, the world's largest importer, significantly increased its tariffs. This more restrictive trade policy could potentially contribute to a decline in the significance of the United States in international trade in the coming years.<br> In this context, fears of trade fragmentation and a slowdown in globalization have emerged as economies adjust to a new reality.<br> - Since 2022, trade between countries with regional trade agreements has generally proven more resilient than trade between countries without such agreements. Trade between developing countries in particular has continued to grow strongly.<br> - Over the next few years, economies with more diversified export markets are expected to experience stronger trade growth.<br> Nevertheless, growth in global merchandise trade accelerated in 2025. Total trade was buoyed by the acceleration of exports to the United States at the beginning of the year to avoid tariffs and the surge in demand for artificial intelligence (AI) products.<br> In summary, global trade growth is expected to continue in the medium term. However, it could prove volatile depending on developments in trade policies and the technology sector, particularly in the United States.<br> \| Change in the volume of merchandise imports \| <br> \| Change in global merchandise trade \|<br> \|:---\|:---\|:---\|<br> \| (index in points, January 2024 = 100) \| <br> \| (annual percentage change) \|<br> \| \| <br> \| \|<br> \| Sources: CPB Netherlands Bureau for Economic Policy Analysis and Ministère des Finances du Québec. \| <br> \| Source: World Trade Organization. \| |

---

Budget 2026-2027 <br> E.52 Budget Plan

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![](exhibit99-12xu001.jpg)

**4. DEVELOPMENTS IN FINANCIAL MARKETS**

❏ **Investor confidence tested by the presence of several risks**

International financial markets have evolved in a relatively favourable environment over the past few months. The global economy has proven more resilient than expected and inflation is under control in most advanced economies, while continued monetary easing and budgetary support have helped sustain growth.

- Most stock markets, in particular the Canadian market, have generally continued to perform well since the fall. In the United States, however, concerns about the future profitability of massive investments in artificial intelligence have resulted in lower returns than elsewhere. Recently, heightened geopolitical tensions have dampened investors' appetite for risk.

- For their part, global bond yields have shown mixed results. They are expected to stabilize over the coming quarters, but significant risks remain regarding high levels of budgetary deficits, public debt in major economies, and future inflation trends.

- Furthermore, although oil prices rose in early 2026 due to geopolitical tensions in the Middle East, they are expected to moderate over the coming months as a result of global production surpluses.

---

| | |
|:---|:---|
| CHART E.38 | CHART E.39 |
| **North American stock markets developments** | **Yield on 10-year federal bonds** |
| (index, December 31, 2024 = 100) | (per cent) |
| ![](exhibit99-12xu122.jpg) | ![](exhibit99-12xu121.jpg) |
|  Note: Most recent figure is for March 5, 2026.<br> Sources: Bloomberg and Ministère des Finances du Québec. | Note: Most recent figure is for March 5, 2026.<br> Source: Bloomberg. |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.53

------

![](exhibit99-12xu001.jpg)

❏ **Status quo for the Bank of Canada in 2026**

In January 2026, the Bank of Canada kept its policy rate at 2.25% for the second consecutive meeting. It considers that the current level of the policy rate remains appropriate if the economy evolves in accordance with its outlook.

- Headline inflation in the country was 2.3% in January, and the Bank expects it to remain close to the 2% target over the coming quarters.

Furthermore, the Bank of Canada believes that ongoing trade uncertainty with the United States and geopolitical risks are weakening the Canadian economy's outlook for growth.

- In this context, the Bank of Canada is expected to keep its policy rate unchanged this year, before raising it in 2027 to 2.50%.

❏ **End of rate cuts in the United States in 2026**

The U.S. Federal Reserve kept its key interest rate in the range of 3.50%-3.75% in January, following three consecutive cuts in the fall of 2025.

- Thanks to the strength of the U.S. economy, and despite the slowdown in the labour market and inflation remaining relatively high, expectations regarding the extent of future monetary easing in the United States have moderated somewhat in recent months.

The Federal Reserve considers that its current monetary policy is appropriate. Therefore, it is expected to be patient before making further adjustments. Two rate cuts are expected for 2026, the next one in June, bringing the key interest rate within the 3.00%-3.25% range.

CHART E.40

**Policy rate in Canada and the United States**

(overnight rate target and federal funds target rate,<sup>(1)</sup> per cent)

![](exhibit99-12xu125.jpg)

(1) Midpoint of the target range for the federal funds rate.

Sources: Statistics Canada, Bloomberg and Ministère des Finances du Québec. <br>

Budget 2026-2027 <br> E.54 Budget Plan

------

![](exhibit99-12xu001.jpg)

❏ **Bond yields are expected to stabilize in 2026**

Since fall 2025, bond yields have been mixed in North America. Toward the end <br>of 2025 they were supported by the expectation of less accommodative monetary policies. Risk premiums on government bonds also continued to trend upward.

- However, the continued slowdown in inflation in Canada and the United States has led to an easing of bond yields in February 2026. Yields began to climb again in early March due to the conflict in the Middle East.

Bond yields are expected to stabilize somewhat over the coming quarters, as the financial markets appear to have fully taken into account the short-term outlook for monetary policy.

- However, bond yields could prove volatile, in particular due to risks associated with expansionary budgetary policies and the persistent inflationary risk stemming from U.S. trade policy.

❏ **The Canadian dollar is expected to gradually appreciate in 2026**

In 2025, the Canadian dollar had a rather difficult year, mainly due to increased economic and trade uncertainty. It depreciated by nearly 5% to an average <br>of 71.5 U.S. cents, its lowest level since 2002.

- However, it recovered somewhat in early 2026, benefiting from the widespread decline of the U.S. dollar and rising commodity prices. However, the currency market remains volatile.

The Canadian dollar is expected to gradually appreciate over the coming quarters. It will mainly be supported by the expected decline of the U.S. dollar against major currencies, in a context where new investments could be more directed outside <br>the United States.

- However, continued uncertainty in trade relations between Canada and the United States, particularly with the upcoming CUSMA review, could limit the upside potential for the Canadian dollar.

TABLE E.11

**Canadian financial markets**

(average annual percentage, unless otherwise indicated, end-of-year data in brackets)

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | **2026** | **2027** |
| &nbsp;&nbsp;Overnight rate target | 2.6 (2.3) | 2.3 (2.3) | 2.4 (2.5) |
| &nbsp;&nbsp;3-month treasury bill | 2.6 (2.2) | 2.2 (2.3) | 2.4 (2.5) |
| &nbsp;&nbsp;10-year bond | 3.2 (3.4) | 3.3 (3.3) | 3.3 (3.3) |
| &nbsp;&nbsp;Canadian dollar (in U.S. cents) | 71.5 (72.9) | 73.6 (74.3) | 75.5 (76.5) |
| &nbsp;&nbsp;U.S. dollar (in Canadian dollars) | 1.40 (1.37) | 1.36 (1.35) | 1.32 (1.31) |

---

Sources: Statistics Canada, Bloomberg and Ministère des Finances du Québec. <br>

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.55

------

![](exhibit99-12xu001.jpg)

❏ **Energy prices will show moderate growth**

Oil prices have risen significantly since the beginning of 2026, largely due to geopolitical tensions, caused in particular by the outbreak of a new armed conflict in the Middle East.

- In 2026, global demand for oil is, however, expected to continue growing at a moderate pace due to a slight slowdown in global economic growth and high global oil inventories.

- Furthermore, abundant global supply should keep the oil market in a significant surplus this year, putting downward pressure on prices over the coming quarters.

The persistent high level of economic uncertainty, geopolitical tensions and potential disruptions to oil trade flows are all factors that could influence oil prices in the coming months.

Meanwhile, natural gas prices more than doubled in the United States in January 2026, fuelled by an increase in demand for gas for heating due to harsh weather conditions.

- Natural gas prices are expected to rise in 2026 and 2027, supported by the expansion of liquefied natural gas export capacity in the United States and increased consumption for electricity generation. However, the expected increase in prices should remain moderate due to the anticipated increase <br>in U.S. production.

---

| | |
|:---|:---|
| CHART E.41 | CHART E.42 |
| **Change in Brent, WTI and WCS oil prices** | **Change in natural gas price** |
| (U.S. dollars per barrel) | (Henry Hub, U.S. dollars per MMBtu) |
| ![](exhibit99-12x061.jpg) | ![](exhibit99-12x062.jpg) |
| Sources: Bloomberg and Ministère des Finances du Québec. | Note: Most recent figure is for March 5, 2026.<br> Source: Bloomberg. |

---

Budget 2026-2027 <br> E.56 Budget Plan

------

![](exhibit99-12xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Increase in the price of several metals since 2025** |
| &nbsp;&nbsp; In 2025, metal prices were influenced by, among other things, U.S. tariff policy and structural disruptions between global supply and demand in several markets. Against this backdrop, prices have generally risen in recent months but remain volatile.<br> Base metal prices were supported by stronger-than-expected Chinese demand, government policies aimed at reducing excess production or limiting exports, and concerns about global supply. Intensified speculative activity in the fourth quarter of 2025 also accentuated the upward trend in metal prices.<br> - The price of aluminum rose by 17% in 2025 due to the outlook for tighter global supply. U.S. tariffs on aluminum imports have more than tripled the premium for aluminum deliveries to the United States and reduced U.S. imports, particularly from Canada.<br> - The price of copper reached an all-time high in January 2026. Several disruptions in operations at major mines have reignited concerns about supply. Uncertainty surrounding the application of U.S. tariffs on copper products, as well as the expected increase in electrification with the rise of AI and the development of data centres, also supported the price.<br> In addition, the price of gold rose by more than 60% in 2025. It then set an all-time high in January 2026 at over US$5 400 per ounce. The price of gold benefited from this metal's role as a safe haven amid geopolitical and trade uncertainties, a resumption of exchange-traded fund purchases, increased physical demand for gold bullion in Asia and continued massive purchases made by central banks seeking to further diversify their reserves.<br> \| Change in base metal prices \| <br> \| Change in demand for and price of gold \|<br> \|:---\|:---\|:---\|<br> \| (index, January 2024 = 100) \| <br> \| (demand in metric tons and price in US$ per troy ounce) \|<br> \| \| <br> \| \|<br> \| Note: The latest month available is February 2026. Sources: Bloomberg and Ministère des Finances du Québec. \| <br> \| Sources: World Gold Council, Bloomberg and Ministère des Finances du Québec. \| |

---

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.57

------

![](exhibit99-12xu001.jpg)

**5. THE MAIN RISKS THAT MAY INFLUENCE THE FORECAST SCENARIO**

The baseline scenario is based on multiple assumptions that are tied to risks that may impact changes in forecasts.

- The main risk concerns changes in U.S. economic and trade policies. Uncertainty regarding tariffs has remained high in the United States since the beginning of 2026.

- An additional increase in tariffs or the end of trade agreements such as CUSMA could heighten supply chain disruptions and cause a slowdown in international trade, thus dampening global economic growth.

- Conversely, the signing of trade agreements, or even a favourable review of CUSMA, could mitigate the extent of the expected economic slowdown.

- Likewise, a U.S. economy that is more resilient than expected in the face of various sources of uncertainty could have a positive impact on global GDP and Québec's GDP.

- More positive than expected effects of expansionary budgetary policy or accelerated deregulation in certain key sectors of the economy could provide stronger support for growth in economic activity in the United States.

Other risks with potential favourable or unfavourable effects include:

- a shift in inflation;

- Under the baseline scenario, headline inflation is expected to hold close to central bank targets in 2026 and 2027. However, the trade dispute, or a prolonged increase in energy prices due to continued geopolitical tensions in the Middle East, could push price growth upward. Conversely, tariffs could weaken the economy more than expected, which could limit inflation.

- In this context, monetary policies could evolve differently from the expected trajectories.

- stronger-than-expected population growth in Québec and Canada over the next few years;

- According to the baseline scenario, Québec is expected to experience slight population declines until 2029, and Canada's population growth is expected to remain stable in 2026 (0.0%) and 2027 (+0.1%). An increase in population in 2026 and 2027 would have a positive effect on economic activity, particularly by boosting demand for goods and services.

The Québec Economy: <br> Recent Developments and Outlook for 2026 and 2027 E.59

------

![](exhibit99-12xu001.jpg)

- persistent weakness in non-residential business investment;

- Low levels of business investment increase the risk of a loss of competitiveness and slow economic growth. This vicious circle keeps productivity low and slows potential economic growth. Less productive businesses generate lower profits, which limits their ability to invest in innovation and in cost reduction.

- a broad-based weakening of the global economy;

- Under the baseline scenario, a slight slowdown in global real GDP is anticipated in 2026. Heightened uncertainty or the occurrence of certain risks may trigger a sharper-than-expected decline in global growth. Such developments would further slow Québec's exports. They could also adversely affect oil prices; the province is a net oil importer.

- a worsening of geopolitical tensions;

- The global economy must contend with significant geopolitical tensions. In particular, the heightened tensions in the Middle East, a leading energy-producing region, represent a risk for global oil supply stability, which could translate into higher prices. Such a development would adversely affect the economy of Québec, a net importer.

- The economic scenario is based on the assumption that, despite escalating tensions with the outbreak of a new armed conflict in the Middle East, the upward effects on energy prices will be temporary and will not have a lasting impact on inflation.

- potential financial market disruptions;

- An excessive increase in debt levels in advanced economies could further weaken debt markets, leading to negative economic and financial repercussions.

- A sudden and rapid revaluation of the prices of certain afssets, particularly on stock markets, is possible.

- The sharp rise in U.S. stock markets in recent years was particularly concentrated in a handful of technology stocks, and was driven by high expectations of earnings growth that may not materialize. In such a case, markets and the economy as a whole could experience disruptions.

- widespread use of artificial intelligence in business operations;

- Such a development would boost long-term productivity and economic growth. However, it could spark temporary disruptions as businesses adapt to this new technology.

- climate events.

- Climate change and unexpected weather events may have a significant economic impact and push up commodity prices.

Budget 2026-2027 <br> E.60 Budget Plan

------

## Exhibit 99.13

------

Exhibit 99.13

Section F

**QUÉBEC'S FINANCIAL SITUATION**

---

| | |
|:---|:---|
| [**Summary**](#page_2) | [**F.3**](#page_2) |
| [**1. Québec's budgetary situation**](#page_8) | [**F.9**](#page_8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[**1.1**Recent developments in the budgetary situa**tion**](#page_9) | [F.10](#page_9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.2 Detailed adjustments in 2025-2026](#page_18) | [F.19](#page_18) |
| [**2. Returning to a balanced budget**](#page_29) | [**F.31**](#page_29) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.1 The path for returning to a balanced budget](#page_32) | [F.34](#page_32) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.2 The continuity of services and the sustainability of public finances](#page_34) | [F.36](#page_34) |
| [**3. Revenue and expenditure forecasts**](#page_40) | [**F.43**](#page_40) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.1 Change in revenue](#page_41) | [F.44](#page_41) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.1.1 Own-source revenue excluding revenue from government enterprises](#page_42) | [F.45](#page_42) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.1.2 Revenue from government enterprises](#page_47) | [F.50](#page_47) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.1.3 Federal transfers](#page_49) | [F.52](#page_49) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.2 Change in expenditure](#page_54) | [F.57](#page_54) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.2.1 Portfolio expenditures](#page_55) | [F.58](#page_55) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.2.2 Debt service](#page_65) | [F.68](#page_65) |
| [**4. Higher public infrastructure investments**](#page_66) | [**F.69**](#page_66) |
| [APPENDIX 1: Portfolio expenditures](#page_72) | [**F.75**](#page_72) |
| [APPENDIX 2: Report on the application of the *Balanced Budget Act*](#page_73) | [**F.77**](#page_73) |

---

Québec's Financial<br> Situation F-1

------

![](exhibit99-13xu001.jpg)

**SUMMARY**

Budget 2026-2027 is an opportunity for the government to provide an overview of Québec's economic and budgetary situation and to set out its policy directions in this regard. This section reports on developments in Québec's budgetary situation for 2025-2026 and presents the budgetary forecasts up to 2030-2031.

❏ **Initial results confirming sound management of public finances**

Through sound expenditure management and stronger-than-expected nominal GDP growth in 2025, generating higher-than-forecast tax revenue, this budget presents a budgetary situation that is proving to be better than that forecast last March.

Compared to the March 2025 budget, the accounting deficit in 2025-2026 is reduced from $11.4 billion to $7.7 billion, or 1.2% of GDP. The accounting deficit, that is, before deposits of dedicated revenues in the Generations Fund, is calculated on a comparable basis to the budgetary balances of the federal government and other Canadian provinces.

In 2026-2027, the accounting balance shows a deficit of $6.3 billion (0.9% of GDP), an improvement of $861 million compared to that forecast in Budget 2025-2026.

The budgetary deficit within the meaning of the *Balanced Budget Act*, after deposits of dedicated revenues in the Generations Fund, is adjusted downward by nearly $3.7 billion in 2025-2026 and $916 million in 2026-2027.

— In accordance with the *Balanced Budget Act*, a balanced budget, after deposits of dedicated revenues in the Generations Fund, will be achieved by 2029-2030 at the latest.

&nbsp;&nbsp;&nbsp;&nbsp; **The government is taking another step toward achieving a balanced budget by reducing the deficits projected for 2025-2026 and 2026-2027 and the gaps to be bridged for subsequent years.**<br> **Québec's net debt burden is also adjusted downward compared to Budget 2025-2026 for each year of the financial framework.**<br>

The economic and geopolitical climate calls for a responsible budget focused on Quebecers' top priorities and responsible management of public finances. Efforts to return to a balanced budget are continuing in order to preserve the long-term sustainability of Québec's finances.

Québec's Financial<br> Situation F-3

------

Over the period covered by the financial framework, the government is taking targeted action to achieve four major objectives: accelerating Québec's economic transformation, supporting the government's main missions, supporting Quebecers and communities and maintaining public infrastructure.

— These significant investments in portfolios provide the basic funding needed to meet the growing needs of the population, improve the accessibility and quality of services offered to citizens, ensure the continuation of essential programs, and thus support the sustainability of public services.

— As a result, growth in portfolio expenditures projected for 2026-2027 is:

— 4.1% in health and social services;

— 2.4% in education;<sup>1</sup>

— 3.7% in higher education.

— In addition, the financial framework includes a total contingency reserve of $8.0 billion, with $2.0 billion in 2026-2027 and $1.5 billion per year as of 2027-2028, which could be used, in particular, to cover unforeseen expenditures or mitigate the effects of more moderate-than-expected economic growth.

— As in 2024-2025, the contingency reserve is not used in 2025-2026.

---

| |
|:---|
| CHART F.1<br>**Change in the accounting balance** |
| (billions of dollars) |
| ![](exhibit99-13x001.jpg) |

---

<sup>________________________________________________</sup>

<sup>1</sup> Excluding the effect in 2025-2026 of the provision for implementing activities supporting the integration and francization of immigrants, the growth in expenditures stands at 3.0%.

F-4 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

&nbsp;&nbsp;**One of the lowest budgetary deficits in Canada**

In 2025-2026, all Canadian provinces showed budgetary deficits. On a comparable basis to the budgetary balances of other Canadian provinces, that is, before deposits of dedicated revenues in the Generations Fund, Québec's deficit stood at $7.7 billion in 2025-2026, or 1.2% of GDP.

As a percentage of GDP, this is one of the lowest deficits among Canadian provinces, after Saskatchewan (0.4% of GDP), Alberta (0.9% of GDP) and Ontario (1.1% of GDP).

Like most Canadian provinces, Québec must rectify its fiscal deficit situation in the medium term. However, it stands out for having a law that, like in Ontario and Alberta, requires a plan or timeline for restoring balance when a deficit occurs.

— However, this law requires a return to a balanced budget after deposits of dedicated revenues in the Generations Fund, which imposes an additional constraint for Québec compared to other provinces.

Québec aims to restore balance by 2029-2030, while several other provinces with deficits have not set a date.

---

| |
|:---|
| **2025-2026 budgetary balance** |
| (percentage of GDP) |
| ![](exhibit99-13x002.jpg) |
| Notes: For Québec, this is the accounting deficit, that is, before deposits of dedicated revenues in the Generations Fund. This deficit is comparable to that of other provinces.<br>Chart information reflects data available as at March 6, 2026. |

---

Québec's Financial<br> Situation F-5

------

❏ **Multi-year financial framework**

Revenue amounts to $166.5 billion in 2026-2027, with growth of 3.7%. Growth will increase to 3.8% in 2027-2028.

— Over the period covered by the financial framework, that is, until 2030-2031, annual revenue growth will average 3.2%.

In 2026-2027, growth in portfolio expenditures will be 1.6%,<sup>2</sup> compared to 4.5% in 2025-2026.

Total expenditure, including debt service, stands at $170.8 billion in 2026-2027, with growth of 1.5%. Growth will be 2.6% in 2027-2028.

— From 2026-2027 to 2030-2031, annual growth in total expenditure will average 2.0%.

<sup>________________________________________________</sup>

<sup>2</sup> Excluding 2025-2026 expenditures not recurring in 2026-2027, including advance payments for public transit infrastructure projects, the growth in portfolio expenditures stands at 3.3% in 2026-2027 instead of 1.6%.

F-6 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

TABLE F.1<br>**Multi-year financial framework**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) |
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **AAGR<sup>(1)</sup>** |
| **Revenue** |  |  |  |  |  |  |  |
| Personal income tax | 49 003 | 50 800 | 52 687 | 54 667 | 56 629 | 58 734 |  |
| Contributions for health services | 9 175 | 9 412 | 9 749 | 10 198 | 10 498 | 10 826 |  |
| Corporate taxes | 14 102 | 14 527 | 15 296 | 15 358 | 15 968 | 17 037 |  |
| School property tax | 1 255 | 1 311 | 1 435 | 1 579 | 1 720 | 1 853 |  |
| Consumption taxes | 29 364 | 30 008 | 30 975 | 31 784 | 32 523 | 33 294 |  |
| Duties, permits and royalties | 6 311 | 6 542 | 6 939 | 7 204 | 7 537 | 7 792 |  |
| Miscellaneous revenue | 15 395 | 15 908 | 16 285 | 16 819 | 17 471 | 18 042 |  |
| Government enterprises | 5 347 | 5 853 | 6 442 | 6 984 | 7 096 | 7 254 |  |
| **Own-source revenue** | **129 952** | **134 361** | **139 808** | **144 593** | **149 442** | **154 832** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change***<sup>***(2)***</sup> | ***3.5*** | ***3.4*** | ***4.1*** | ***3.4*** | ***3.4*** | ***3.6*** | ***3.6*** |
| Federal transfers | 30 577 | 32 131 | 32 948 | 33 022 | 32 337 | 33 325 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *0.3* | *5.1* | *2.5* | *0.2* | *-2.1* | *3.1* | *1.7* |
| **Total revenue** | **160 529** | **166 492** | **172 756** | **177 615** | **181 779** | **188 157** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***2.8*** | ***3.7*** | ***3.8*** | ***2.8*** | ***2.3*** | ***3.5*** | ***3.2*** |
| **Expenditure** |  |  |  |  |  |  |  |
| Portfolio expenditures | -158 029 | -160 489 | -164 279 | -165 909 | -167 887 | -173 218 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(3)*</sup> | *4.5* | *1.6* | *2.4* | *1.0* | *1.2* | *3.2* | *1.9* |
| Debt service | -10 155 | -10 268 | -10 931 | -11 340 | -11 612 | -12 271 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *1.9* | *1.1* | *6.5* | *3.7* | *2.4* | *5.7* | *3.9* |
| **Total expenditure** | **-168 184** | **-170 757** | **-175 210** | **-177 249** | **-179 499** | **-185 489** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***4.3*** | ***1.5*** | ***2.6*** | ***1.2*** | ***1.3*** | ***3.3*** | ***2.0*** |
| Contingency reserve |  | -2 000 | -1 500 | -1 500 | -1 500 | -1 500 |  |
| **ACCOUNTING SURPLUS (DEFICIT)<sup>(4)</sup>** | **-7 655** | **-6 265** | **-3 954** | **-1 134** | **780** | **1 168** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.2*** | ***0.9*** | ***0.6*** | ***0.2*** | ***0.1*** | ***0.2*** |  |

---

Note: Totals may not add due to rounding.

(1) Average annual growth rate, corresponding to the geometric mean over five years, from 2026-2027 to 2030-2031.

(2) In 2027-2028, the growth in own-source revenue is primarily due to the 3.4% change in nominal GDP in 2027, the increase in Hydro-Québec's results, and the effect of harmonization with the accelerated depreciation and expensing measures announced in the 2024 federal budget.

(3) Excluding 2025-2026 expenditures not recurring in 2026-2027, including advance payments for public transit infrastructure projects, the growth in portfolio expenditures stands at 3.3% in 2026-2027 instead of 1.6%.

(4) The accounting surplus (deficit) refers to the operating surplus (deficit) as presented in the public accounts.

Québec's Financial<br> Situation F-7

------

&nbsp;&nbsp;**Budgetary balance within the meaning of the** ***Balanced Budget Act***

**Maintaining a balanced budget and reducing the debt burden**

The *Balanced Budget Act*, which obliges the government to balance the budget, establishes a more demanding definition of the budgetary balance than those that apply to other provinces or are prescribed by accounting standards for determining a government's surplus (deficit).

Indeed, the budgetary balance within the meaning of the Act excludes certain revenue considered in the accounting surplus (deficit) as it is invested in the Generations Fund to repay the debt. This revenue is earmarked in the *Act to reduce the debt and establish the Generations Fund*.

This legislative framework is designed to ensure the long-term sustainability of public finances.

**Budgetary balance within the meaning of the Act**

The budgetary balance according to the Act shows deficits of $9.9 billion in 2025-2026, or 1.5% of GDP, and $8.6 billion in 2026-2027, or 1.3% of GDP. As of 2027-2028, deficits will gradually decline, with balance being achieved in 2029-2030.

A balanced budget will be maintained thereafter.

**Returning to a balanced budget**

Budget 2026-2027 forecasts a reduction in the gaps to be bridged of $250 million per year in 2027-2028 and 2028-2029, $500 million in 2029-2030 and $750 million in 2030-2031. These remain projected at $750 million in 2027-2028, $2.3 billion in 2028-2029, $2 billion in 2029-2030 and $1.8 billion in 2030-2031. Once the uncertainty mainly related to CUSMA negotiations dissipates, the economic situation should recover and allow for the gaps to be bridged.

In accordance with the *Balanced Budget Act*, balance, after deposits of dedicated revenues in the Generations Fund, will be achieved by 2029-2030 at the latest.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Budgetary balance within the meaning of the** ***Balanced Budget Act*** | **Budgetary balance within the meaning of the** ***Balanced Budget Act*** | **Budgetary balance within the meaning of the** ***Balanced Budget Act*** | **Budgetary balance within the meaning of the** ***Balanced Budget Act*** | **Budgetary balance within the meaning of the** ***Balanced Budget Act*** | **Budgetary balance within the meaning of the** ***Balanced Budget Act*** | **Budgetary balance within the meaning of the** ***Balanced Budget Act*** |
| (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) |
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br> 2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** |
| **ACCOUNTING SURPLUS (DEFICIT)<sup>(1)</sup>** | **-7 655** | **-6 265** | **-3 954** | **-1 134** | **780** | **1 168** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.2*** | ***0.9*** | ***0.6*** | ***0.2*** | ***0.1*** | ***0.2*** |
| Gap to be bridged |  |  | 750 | 2 250 | 2 000 | 1 750 |
| Deposits of dedicated revenues in the Generations Fund | -2 289 | -2 347 | -2 491 | -2 616 | -2 780 | -2 918 |
| **BUDGETARY BALANCE WITHIN THE MEANING OF**<br>**THE** ***BALANCED BUDGET ACT*** | **-9 944** | **-8 612** | **-5 695** | **-1 500** | **-** | **-** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.5*** | ***1.3*** | ***0.8*** | ***0.2*** | ***0.0*** | ***0.0*** |

---

Note: Totals may not add due to rounding.

(1) Accounting surplus (deficit) refers to the surplus (deficit) from operations as presented in the public accounts. <br>

F-8 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

**1. QUÉBEC'S BUDGETARY SITUATION**

In 2026-2027, revenue stands at $166.5 billion, while portfolio expenditures, being expenditures tied to the delivery of public services, stand at $160.5 billion.

— Debt service amounts to $10.3 billion.

In addition, the financial framework includes a contingency reserve of $2.0 billion to cover unforeseen expenditures or mitigate the effects of more moderate-than-expected economic growth. This reserve is at a comparable level to that forecast in 2025-2026.

— After taking into account the contingency reserve, the accounting balance shows a deficit of $6.3 billion, or 0.9% of GDP.

— After deposits of dedicated revenues in the Generations Fund, the budgetary balance shows a deficit of $8.6 billion, or 1.3% of GDP.

TABLE F.2<br>**Québec's budget - March 2026**

---

| | |
|:---|:---|
| (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) |
|  | **2026-2027** |
| **Revenue** |  |
| Own-source revenue | 134 361 |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *3.4* |
| Federal transfers | 32 131 |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *5.1* |
| **Total revenue** | **166 492** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***3.7*** |
| **Expenditure** |  |
| Portfolio expenditures | -160 489 |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *1.6* |
| Debt service | -10 268 |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *1.1* |
| **Total expenditure** | **-170 757** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***1.5*** |
| Contingency reserve | -2 000 |
| **ACCOUNTING SURPLUS (DEFICIT) - MARCH 2026** | **-6 265** |
| ***% of GDP*** | ***0.9*** |
| Deposits of dedicated revenues in the Generations Fund | -2 347 |
| **BUDGETARY BALANCE<sup>(1)</sup>** | **-8 612** |
| ***% of GDP*** | ***1.3*** |

---

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

Québec's Financial<br> Situation F-9

------

1.1 **Recent developments in the budgetary situation**

This section presents the recent developments in Québec's budgetary situation as well as the main adjustments to the forecasts from 2025-2026 to 2027-2028.

❏ **Main adjustments from 2025-2026 to 2027-2028**

Since Budget 2025-2026, the economic and budgetary situation has led to favourable adjustments of $1.9 billion in 2025-2026, $3.2 billion in 2026-2027 and $3.0 billion in 2027-2028.

For this period, the government is implementing new initiatives totalling $102 million in 2025-2026, $2.4 billion in 2026-2027 and $2.8 billion in 2027-2028 to accelerate Québec's economic transition, support the government's main missions, support Quebecers and communities with targeted action, and maintain public infrastructure.

— These significant investments in portfolios provide the basic funding needed to meet the growing needs of the population, improve the accessibility and quality of services offered to citizens, ensure the continuation of essential programs, and thus support the sustainability of public services.

F-10 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

TABLE F.3<br>**Adjustments to the financial framework since March 2025**

---

| | | | |
|:---|:---|:---|:---|
| (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) |
|  | **2025-**<br>**2026** | **2026-**<br>**2027** | **2027-**<br>**2028** |
| **ACCOUNTING SURPLUS (DEFICIT) - MARCH 2025** | **-11 430** | **-7 126** | **-4 173** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.8*** | ***1.1*** | ***0.6*** |
| **ECONOMIC AND BUDGETARY SITUATION** |  |  |  |
| Own-source revenue excluding revenue from government enterprises |  |  |  |
| - Tax revenue<sup>(1)</sup> | 3 990 | 3 382 | 2 944 |
| - Other revenue | 187 | -430 | -360 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal | 4 177 | 2 952 | 2 584 |
| Revenue from government enterprises<sup>(2)</sup> | 79 | -1 189 | -680 |
| Federal transfers | -33 | -231 | -123 |
| **Subtotal - Revenue** | **4 223** | **1 532** | **1 781** |
| Portfolio expenditures<sup>(3)</sup> | -1 861 | 1 546 | 573 |
| Debt service | -485 | 134 | 625 |
| **Subtotal - Expenditure** | **-2 346** | **1 680** | **1 198** |
| **TOTAL ADJUSTMENTS TO THE ECONOMIC**<br>**AND BUDGETARY SITUATION** | **1 877** | **3 212** | **2 979** |
| **NOVEMBER 2025 INITIATIVES<sup>(4)</sup>** | **-65** | **-218** | **-195** |
| **MARCH 2026 INITIATIVES** |  |  |  |
| Accelerating Québec's economic transformation |  | -480 | -507 |
| Supporting the government's main missions |  | -910 | -928 |
| Supporting Quebecers and communities with targeted action | -37 | -742 | -1 130 |
| **Subtotal** | **-37** | **-2 133** | **-2 565** |
| **TOTAL INITIATIVES** | **-102** | **-2 351** | **-2 760** |
| Contingency reserve | 2 000 |  |  |
| **ACCOUNTING SURPLUS (DEFICIT) - MARCH 2026** | **-7 655** | **-6 265** | **-3 954** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.2*** | ***0.9*** | ***0.6*** |

---

Note: Totals may not add due to rounding.

(1) The adjustment of tax revenue in 2025-2026 is due to the recurrence of higher-than-expected results observed at the end of 2024-2025 and in 2025-2026, tied to the upward adjustment to nominal GDP growth of 0.6 percentage points in 2024 and 1.1 percentage points in 2025. In 2026-2027 and 2027-2028, the lower adjustments of tax revenue result from the downward adjustment to growth in exports (-1.3 percentage points in 2026) and household consumption excluding food expenditures and shelter (-0.5 percentage points in 2026), as well as the effect in 2027-2028 of the cancellation of the increase in the capital gains inclusion rate.

(2) The negative adjustments in 2026-2027 and 2027-2028 are mainly due to the decline in Hydro-Québec's results, largely resulting from low runoff.

(3) An explanation of adjustments to portfolio expenditures is provided on page F.13.

(4) The financial impact of the November 2025 initiatives excludes the amounts provided in the financial framework for the indexation of the tax system, as well as the reductions in the contribution rates and premium rates for the Québec Pension Plan and Québec Parental Insurance Plan, respectively, which are entirely funded by each of the plans.

Québec's Financial<br> Situation F-11

------

![](exhibit99-13xu001.jpg)

▮ **Adjustments related to the economic and budgetary situation**

Changes in the economic and budgetary situation since Budget 2025-2026 result in positive adjustments of $1.9 billion in 2025-2026, $3.2 billion in 2026-2027 and $3.0 billion in 2027-2028. These adjustments are primarily attributable to:

— an increase in own-source revenue, excluding revenue from government enterprises, of $4.2 billion in 2025-2026, $3.0 billion in 2026-2027 and $2.6 billion in 2027-2028. These adjustments reflect:

— a $4.0-billion increase in tax revenue in 2025-2026, due to the recurrence of higher-than-expected results observed at the end of 2024-2025 and in 2025-2026, tied to the upward adjustment to nominal GDP growth by 0.6 percentage points in 2024 and 1.1 percentage points in 2025. In 2026-2027 and 2027-2028, adjustments of $3.4 billion and $2.9 billion in tax revenue are expected due to the downward adjustment to growth in exports (-1.3 percentage points in 2026) and household consumption excluding food expenditures and shelter (-0.5 percentage points in 2026), as well as the effect in 2027-2028 of the cancellation of the increase in the capital gains inclusion rate,<sup>3</sup>

— a favourable adjustment of other revenue of $187 million in 2025-2026, due, in particular, to higher-than-expected investment income of the Generations Fund and revenue from natural resources, partially offset by a decline in revenue from the carbon market. In 2026-2027 and 2027-2028, the downward adjustments of $430 million and $360 million are attributable to, among other things, a decline in revenue from the carbon market;

— an increase in revenue from government enterprises of $79 million in 2025-2026, due in particular to increased revenue from Investissement Québec, and downward adjustments of $1.2 billion in 2026-2027 and $680 million in 2027-2028, mainly due to the decline in Hydro-Québec's results because of the low runoff;

— a downward adjustment of federal transfers of $33 million in 2025-2026, $231 million in 2026-2027 and $123 million in 2027-2028 due, in particular, to a reduction in Québec's demographic weight reported in Statistics Canada's data published in September 2025;<sup>4</sup>

<sup>________________________________________________</sup>

<sup>3</sup> The Québec government harmonized its tax system with the changes made by the federal government in its 2025 budget and cancelled the increase in the capital gains inclusion rate that had been announced in 2024.

<sup>4</sup> The update of population data has an impact on the main federal transfers to the provinces (equalization, Canada Health Transfer [CHT] and Canada Social Transfer [CST]) as they are calculated on a per capita basis.

F-12 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

— an increase in portfolio expenditures of $1.9 billion in 2025-2026, and decreases of $1.5 billion in 2026-2027 and $573 million in 2027-2028;

— For 2025-2026, the adjustment is primarily due to an increase in expenditures of $500 million, including $250 million in the Santé et Services sociaux portfolio and $250 million related to the reinvestment in education announced in summer 2025, and to advance payments of $1.7 billion for public transit infrastructure projects, mitigated by a decrease in expenditures under the 2030 Plan for a Green Economy as a result of the decline in anticipated revenue from the carbon market.

— In 2026-2027 and 2027-2028, the adjustments are mainly attributable to the decrease in expenditures related to the 2030 Plan for a Green Economy as a result of the adjustments to anticipated revenue from the carbon market, reductions in expenditures resulting from advance payments in 2025-2026 for public transit infrastructure projects, and the change in the pace of realization of federally funded local infrastructure projects.

— an upward adjustment of $485 million in debt service in 2025-2026, which is primarily due to higher-than-anticipated long-term interest rates worldwide. Subsequently, a downward adjustment of $134 million in 2026-2027 and $625 million in 2027-2028 is expected due to lower deficits in 2024-2025 and 2026-2027, as well as the better performance of the Retirement Plans Sinking Fund in 2025-2026.

Québec's Financial<br> Situation F-13

------

▮ **Budget 2026-2027 initiatives**

In this budget, the government is planning initiatives of $2.1 billion in 2026-2027, namely:

— $480 million to accelerate Québec's economic transformation;

— $910 million to support the government's main missions;

— $742 million to support Quebecers and communities with targeted action.

**Budget 2026-2027 initiatives**

The initiatives in Budget 2026-2027 total $9.6 billion over six years, as follows:

— $1.7 billion to accelerate Québec's economic transformation;

— $4.3 billion to support the government's main missions;

— $3.6 billion to support Quebecers and communities with targeted action.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) | **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) | **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) | **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) | **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) | **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) | **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) | **Financial impact of the initiatives of Budget 2026-2027**<br>(millions of dollars) |
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **Total** |
| **Initiatives** |  |  |  |  |  |  |  |
| Accelerating Québec's economic transformation<sup>(1)</sup> |  | -480 | -507 | -361 | -205 | -150 | -1 704 |
| Supporting the government's main missions<sup>(2)</sup> |  | -910 | -928 | -851 | -795 | -791 | -4 275 |
| Supporting Quebecers and communities with targeted action<sup>(3)</sup> | -37 | -742 | -1 130 | -724 | -504 | -479 | -3 615 |
| **TOTAL** | **-37** | **-2 133** | **-2 565** | **-1 936** | **-1 503** | **-1 420** | **-9 594** |

---

Note: Totals may not add due to rounding.

(1) For more details, see Section B, "Accelerating Québec's Economic Transformation."

(2) For more details, see Section C, "Supporting the Government's Main Missions."

(3) For more details, see Section D, "Supporting Quebecers and Communities with Targeted Action." <br>

F-14 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

**Recap of the November 2025 initiatives**

In the *Update on Québec's Economic and Financial Situation - Fall 2025*, the government announced investments totalling $483 million in 2025-2026, $2.0 billion in 2026-2027 and $2.0 billion in 2027-2028.

These investments have made it possible to introduce initiatives for:

— returning money to Quebecers;

— increasing Québec's economic resilience.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Financial impact of the November 2025 initiatives** | **Financial impact of the November 2025 initiatives** | **Financial impact of the November 2025 initiatives** | **Financial impact of the November 2025 initiatives** | **Financial impact of the November 2025 initiatives** | **Financial impact of the November 2025 initiatives** | **Financial impact of the November 2025 initiatives** |
| (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) |
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **Total** |
| Returning money to Quebecers | -333 | -1 347 | -1 379 | -1 396 | -1 420 | -5 875 |
| Increasing Québec's <br>economic resilience | -151 | -631 | -632 | -519 | -537 | -2 470 |
| **Subtotal - Initiatives** | **-483** | **-1 979** | **-2 011** | **-1 915** | **-1 957** | **-8 345** |
| Planned funding<sup>(1)</sup> | 418 | 1 761 | 1 816 | 1 855 | 1 897 | 7 747 |
| **TOTAL** | **-65** | **-218** | **-195** | **-60** | **-60** | **-598** |

---

Note: Totals may not add due to rounding.

(1) The amounts for indexing the tax system are already included in the financial framework. Reductions in the contribution rates and premium rates for the Québec Pension Plan and Québec Parental Insurance Plan, respectively, are entirely funded by each plan. Of the financial impact, $31.3 million in 2025-2026, $126.3 million in 2026-2027 and $97.1 million in 2027-2028 will be financed by the available funds from an increase in the share of public transit funding from the Electrification and Climate Change Fund. $30.0 million will be drawn from the Electrification and Climate Change Fund from 2025-2026 to 2027-2028.

▮ **Maintaining the contingency reserve** 

As in 2024-2025, the $2.0-billion contingency reserve that was provided in Budget 2025-2026 is not used.

For subsequent years, it is maintained at $2.0 billion in 2026-2027 and $1.5 billion per year thereafter.

— The reserve, which totals $8.0 billion over five years, could, in particular, be used to cover unforeseen expenditures or mitigate the effects of more moderate-than-expected economic growth.

Québec's Financial<br> Situation F-15

------

▮ **Gap to be bridged**

The more favourable-than-expected budget forecasts make it possible to reduce the gap to be bridged on a recurring basis over the period covered by the financial framework. The gap is reduced by $250 million in 2027-2028 and 2028-2029, then by $500 million in 2029-2030 and $750 million in 2030-2031.

The financial framework still forecasts a gap to be bridged of $750 million in 2027-2028, $2.3 billion in 2028-2029, $2.0 billion in 2029-2030 and $1.8 billion in 2030-2031.

— However, these amounts are lower than the deposits of dedicated revenues in the Generations Fund expected for those years.

As a result, in accordance with the *Balanced Budget Act*, a balanced budget, after deposits of dedicated revenues in the Generations Fund, will be achieved by 2029-2030 at the latest.

Once the uncertainty mainly related to CUSMA negotiations dissipates, the economic situation should recover and allow for the gaps to be bridged.

F-16 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

**Adjustments since the fall 2025 update**

Since the publication of the *Update on Québec's Economic and Financial Situation - Fall 2025*, the adjustments to the financial framework are due, in particular, to:

— an increase in revenue, mainly due to a favourable change in tax revenue;

— an increase in expenditure in 2025-2026 followed by a decrease in 2026-2027, mainly due to advance payments for public transit infrastructure projects in 2025-2026;

— the cost of the March 2026 initiatives;

— the non-utilization of the contingency reserve in 2025-2026.

---

| | | | |
|:---|:---|:---|:---|
| **Adjustments to the financial framework since the fall 2025 update**<br>(millions of dollars, unless otherwise indicated) | **Adjustments to the financial framework since the fall 2025 update**<br>(millions of dollars, unless otherwise indicated) | **Adjustments to the financial framework since the fall 2025 update**<br>(millions of dollars, unless otherwise indicated) | **Adjustments to the financial framework since the fall 2025 update**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** |
| **ACCOUNTING SURPLUS (DEFICIT) - NOVEMBER 2025** | **-9 898** | **-7 149** | **-4 185** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.5*** | ***1.1*** | ***0.6*** |
| **ECONOMIC AND BUDGETARY SITUATION** |  |  |  |
| Own-source revenue excluding revenue<br>from government enterprises |  |  |  |
| - Tax revenue<sup>(1)</sup> | 2 351 | 2 524 | 2 615 |
| - Other revenue | 155 | -103 | -58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal | 2 506 | 2 421 | 2 557 |
| Revenue from government enterprises | -95 | -536 | -830 |
| Federal transfers | -617 | 54 | 860 |
| **Subtotal - Revenue** | **1 794** | **1 939** | **2 587** |
| Portfolio expenditures | -1 557 | 1 062 | -141 |
| Debt service | 43 | 15 | 350 |
| **Subtotal - Expenditure** | **-1 514** | **1 077** | **209** |
| **TOTAL ADJUSTMENTS TO THE ECONOMIC** <br>**AND BUDGETARY SITUATION** | **280** | **3 017** | **2 796** |
| **MARCH 2026 INITIATIVES** |  |  |  |
| Accelerating Québec's economic transformation |  | -480 | -507 |
| Supporting the government's main missions |  | -910 | -928 |
| Supporting Quebecers and communities with targeted action | -37 | -742 | -1 130 |
| **TOTAL INITIATIVES** | **-37** | **-2 133** | **-2 565** |
| Contingency reserve | 2 000 |  |  |
| **ACCOUNTING SURPLUS (DEFICIT) - MARCH 2026** | **-7 655** | **-6 265** | **-3 954** |
| ***% of GDP*** | ***1.2*** | ***0.9*** | ***0.6*** |

---

Note: Totals may not add due to rounding.

(1) The adjustment of tax revenue since the fall 2025 update are due to the upward adjustment to nominal GDP growth (+0.5 percentage points in 2025 and +0.4 percentage points in 2026) and the increase in capital gains realized by individuals and corporations thanks to the strong performance of financial markets in 2025. <br>

Québec's Financial<br> Situation F-17

------

**Adjustments to budgetary balances within** <br>**the meaning of the** ***Balanced Budget Act***

Under the *Balanced Budget Act*, the budgetary balance corresponds to the accounting surplus or deficit presented in the public accounts (surplus or deficit from operations) reduced by the amount of revenues dedicated to the Generations Fund and adjusted to take into account certain accounting changes, if applicable.

Budget 2026-2027 reports an improvement in the accounting deficit of $3.8 billion in 2025-2026, $861 million in 2026-2027 and $219 million in 2027-2028.

Added to these adjustments are deposits of dedicated revenues in the Generations Fund, which are up by $112 million in 2025-2026, due to the increase in investment income. For 2026-2027 and 2027-2028, the dedicated revenues have been adjusted downward by $55 million and $31 million, respectively. In 2027-2028, there is also a $250-million downward adjustment to the gap to be bridged.

Thus, the deficit within the meaning of the Act stands at $9.9 billion in 2025-2026, $8.6 billion in 2026-2027 and $5.7 billion in 2027-2028.

---

| | | | |
|:---|:---|:---|:---|
| **Adjustments to budgetary balances within the meaning** <br>**of the** ***Balanced Budget Act***<br>(millions of dollars) | **Adjustments to budgetary balances within the meaning** <br>**of the** ***Balanced Budget Act***<br>(millions of dollars) | **Adjustments to budgetary balances within the meaning** <br>**of the** ***Balanced Budget Act***<br>(millions of dollars) | **Adjustments to budgetary balances within the meaning** <br>**of the** ***Balanced Budget Act***<br>(millions of dollars) |
|  | **2025-2026** | **2026-2027** | **2027-2028** |
| **BUDGETARY BALANCE<sup>(1)</sup>** **- MARCH 2025** | **-13 607** | **-9 528** | **-5 695** |
| Adjustments to the economic and budgetary situation | 1 877 | 3 212 | 2 979 |
| Fall 2025 update initiatives | -65 | -218 | -195 |
| March 2026 initiatives | -37 | -2 133 | -2 565 |
| Contingency reserve adjustment | 2 000 |  |  |
| **Subtotal - Accounting surplus (deficit) adjustments** | **3 775** | **861** | **219** |
| Decrease in the gap to be bridged |  |  | -250 |
| Adjustments to deposits of dedicated revenues in the Generations Fund | -112 | 55 | 31 |
| **BUDGETARY BALANCE<sup>(1)</sup>** **- MARCH 2026** | **-9 944** | **-8 612** | **-5 695** |

---

Note: Totals may not add due to rounding.

(1) Budgetary balance within the meaning of the *Balanced Budget Act*. <br>

F-18 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

1.2 **Detailed adjustments in 2025-2026**

In 2025-2026, the accounting deficit stands at $7.7 billion. This represents an improvement of $3.8 billion compared to the accounting deficit of $11.4 billion forecast in March 2025, due, in particular, to:

— a $4.1-billion increase in own-source revenue excluding revenue from government enterprises in 2025-2026, due to:

— a positive adjustment of $4.0 billion in tax revenue, owing to the recurrence of higher-than-expected results observed at the end of 2024-2025 and in 2025-2026, tied to the upward adjustment to nominal GDP growth of 0.6 percentage points in 2024 and 1.1 percentage points in 2025, and the increase in capital gains realized by individuals and corporations reflecting the strong performance of financial markets in 2025,

— an adjustment of $187 million to other revenue, due in particular to investment income of the Generations Fund and higher-than-expected revenue from natural resources, partially offset by a decline in revenue from the carbon market;

— a $79-million increase in revenue from government enterprises, mainly attributable to an increase in the results of Investissement Québec;

— a $1.9-billion increase in portfolio expenditures, including:

— a $1.9-billion adjustment stemming mainly from a $500-million increase in expenditures, including $250 million for the Santé et Services sociaux portfolio and $250 million related to the reinvestment in education announced in summer 2025, and $1.7 billion in advance payments for public transit infrastructure projects. This adjustment is mitigated by a decrease in expenditures under the 2030 Plan for a Green Economy, resulting from a decline in anticipated revenue from the carbon market,

— initiatives related to the expenditures announced in the *Update on Québec's Economic and Financial Situation - Fall 2025* and Budget 2026-2027 totalling $66 million;

— a $485-million increase in debt service, primarily due to higher-than-anticipated long-term interest rates worldwide;

— the non-utilization of the $2.0-billion contingency reserve projected in March 2025.

Québec's Financial<br> Situation F-19

------

TABLE F.4

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Adjustments to the 2025-2026 financial framework since March 2025**<br>(millions of dollars) | **Adjustments to the 2025-2026 financial framework since March 2025**<br>(millions of dollars) | **Adjustments to the 2025-2026 financial framework since March 2025**<br>(millions of dollars) | **Adjustments to the 2025-2026 financial framework since March 2025**<br>(millions of dollars) | **Adjustments to the 2025-2026 financial framework since March 2025**<br>(millions of dollars) | **Adjustments to the 2025-2026 financial framework since March 2025**<br>(millions of dollars) |
|  | **2025-2026** | **2025-2026** | **2025-2026** | **2025-2026** | **2025-2026** |
|  | **March 2025** | **Adjustments** | **Adjustments** | **Adjustments** | **March 2026** |
|  |  | **Economic and<br>budgetary<br>situation** | **Initiatives**<br>**and other<br>adjustments** | **Total** |  |
| Own-source revenue |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax revenue | 98 945 | 3 990 | -36 | 3 954 | 102 899 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revenue | 21 519 | 187 |  | 187 | 21 706 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subtotal | 120 464 | 4 177 | -36 | 4 141 | 124 605 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue from government enterprises | 5 268 | 79 |  | 79 | 5 347 |
| Total own-source revenue | 125 732 | 4 256 | -36 | 4 220 | 129 952 |
| Federal transfers | 30 610 | -33 |  | -33 | 30 577 |
| **Revenue** | **156 342** | **4 223** | **-36** | **4 187** | **160 529** |
| Portfolio expenditures | -156 102 | -1 861 | -66 | -1 927 | -158 029 |
| Debt service | -9 670 | -485 |  | -485 | -10 155 |
| **Expenditure** | **-165 772** | **-2 346** | **-66** | **-2 412** | **-168 184** |
| Contingency reserve | -2 000 |  | 2 000 | 2 000 |  |
| **ACCOUNTING**<br>**SURPLUS (DEFICIT)** | **-11 430** | **1 877** | **1 898** | **3 775** | **-7 655** |
| Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. |

---

F-20 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu002.jpg)

❏ **Own-source revenue excluding revenue from government enterprises**

For 2025-2026, own-source revenue excluding revenue from government enterprises is adjusted upward by $4.1 billion compared to Budget 2025-2026 forecasts and totals $124.6 billion.

— Tax revenue is adjusted upward by $4.0 billion, supported by higher-than-anticipated personal income tax, corporate tax and consumption tax revenues.

— Other revenue is adjusted upward by $187 million.

TABLE F.5

---

| | |
|:---|:---|
| **Adjustments to own-source revenue excluding revenue** <br>**from government enterprises**<br>(millions of dollars) | **Adjustments to own-source revenue excluding revenue** <br>**from government enterprises**<br>(millions of dollars) |
|  | **2025-2026** |
| **OWN-SOURCE REVENUE<sup>(1)</sup>** **- MARCH 2025** | **120 464** |
| **Tax revenue** |  |
| Personal income tax | 2 059 |
| Contributions for health services | -67 |
| Corporate taxes | 1 611 |
| School property tax | -91 |
| Consumption taxes | 442 |
| **Subtotal** | **3 954** |
| **Other revenue** |  |
| Duties, permits and royalties | 91 |
| Miscellaneous revenue | 96 |
| **Subtotal** | **187** |
| **Total adjustments** | **4 141** |
| **OWN-SOURCE REVENUE<sup>(1)</sup>** **- MARCH 2026** | **124 605** |

---

(1) Own-source revenue excluding revenue from government enterprises.

Québec's Financial<br> Situation F-21

------

▮ **Tax revenue**

For 2025-2026, personal income tax revenue is adjusted upward by $2.1 billion compared to the March 2025 forecast.

— This adjustment is due to the recurrence of higher-than-expected source deductions observed at the end of 2024-2025, the effect of which has continued since the beginning of fiscal year 2025-2026.

— It is also due to the 0.7-percentage-point upward adjustment to wage and salary growth in 2025, from 3.7% to 4.4%, as well as the impact the 2025 performance of financial markets had on capital gains realized by taxpayers.

Contributions for health services are adjusted downward by $67 million in 2025-2026.

— This adjustment is due to the recurrence of weaker-than-expected results at the end of 2024-2025, while the growth in wages and salaries is adjusted upward by 0.7 percentage points in 2025, rising from 3.7% to 4.4%.

— It is also explained by the implementation of a temporary holiday from contributions to the Health Services Fund in 2026 and 2027 to support the agricultural, forestry and fishing sectors, which are essential to the vitality of the regions.

Corporate tax revenue is adjusted upward by $1.6 billion in 2025-2026.

— This favourable adjustment is due to the recurrence of higher-than-expected results observed at the end of 2024-2025, the effect of which has continued since the beginning of fiscal year 2025-2026.

— It is also due to the net operating surplus of corporations, whose change was adjusted upward by 6.8 percentage points in 2025, from -1.1% to 5.7%.

Revenue from the school property tax is adjusted downward by $91 million in 2025-2026.

— This adjustment is due, in particular, to the additional contribution from the Québec government to limit the average increase in school taxes to 3% for 2025-2026.

F-22 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

Consumption tax revenue, which is derived mainly from the Québec sales tax, is adjusted upward by $442 million in 2025-2026.

— This upward adjustment is due to higher-than-expected cash inflow stemming from the Québec sales tax since the start of 2025-2026, while growth in household consumption<sup>5</sup> was adjusted downward by 1.4 percentage points in 2025, from 4.0% to 2.6%.

— It is also due to the 6.2-percentage-point upward adjustment to growth in residential construction investment in 2025, from 8.0% to 14.2%.

▮ **Other revenue**

In 2025-2026, revenue from duties, permits and royalties is adjusted upward by $91 million compared to the March 2025 forecast.

— This favourable adjustment is due mainly to higher-than-expected revenue from natural resources, particularly mining revenue tied to the strong performance of gold mining corporations, supported by historically high prices.

— However, it is offset by lower-than-expected revenue from the carbon market.

Miscellaneous revenue is adjusted upward by $96 million in 2025-2026, due, in particular, to investment income of the Generations Fund, which is higher than expected.

<sup>________________________________________________</sup>

<sup>5</sup> Household consumption excluding food expenditures and shelter.

Québec's Financial<br> Situation F-23

------

TABLE F.6

---

| | | | |
|:---|:---|:---|:---|
| **Changes in the main tax bases**<br>(percentage change and difference in percentage points) | **Changes in the main tax bases**<br>(percentage change and difference in percentage points) | **Changes in the main tax bases**<br>(percentage change and difference in percentage points) | **Changes in the main tax bases**<br>(percentage change and difference in percentage points) |
|  | **2024** | **2025** | **2026** |
| **Nominal GDP** |  |  |  |
| - March 2026 | 5.9 | 4.5 | 3.5 |
| - March 2025 | 5.3 | 3.4 | 3.4 |
| **Difference** | **0.6** | **1.1** | **0.1** |
| **Wages and salaries** |  |  |  |
| - March 2026 | 6.0 | 4.4 | 3.0 |
| - March 2025 | 5.6 | 3.7 | 3.0 |
| **Difference** | **0.4** | **0.7** | **-** |
| **Net operating surplus of corporations** |  |  |  |
| - March 2026 | 3.1 | 5.7 | 3.7 |
| - March 2025 | 0.4 | -1.1 | 3.4 |
| **Difference** | **2.7** | **6.8** | **0.3** |
| **Total exports** |  |  |  |
| - March 2026 | 3.3 | 0.7 | 2.2 |
| - March 2025 | 4.1 | 2.7 | 3.5 |
| **Difference** | **-0.8** | **-2.0** | **-1.3** |
| **Household consumption excluding**<br>**food expenditures and shelter** |  |  |  |
| - March 2026 | 4.1 | 2.6 | 2.7 |
| - March 2025 | 3.7 | 4.0 | 3.2 |
| **Difference** | **0.4** | **-1.4** | **-0.5** |
| **Residential investment** |  |  |  |
| - March 2026 | 9.4 | 14.2 | 3.4 |
| - March 2025 | 5.6 | 8.0 | 3.6 |
| **Difference** | **3.8** | **6.2** | **-0.2** |

---

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

F-24 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

**Own-source revenue: favourable adjustment in Québec**<br>**and certain Canadian provinces in 2025-2026**

In Québec, own-source revenue<sup>1</sup> for 2025-2026 is adjusted upward by $4.1 billion, or 3.4%, compared to the March 2025 budget. This adjustment is due to an increase in tax revenue, including personal income tax (+$2.1 billion) and corporate taxes (+$1.6 billion), supported by the upward adjustment of tax bases and the impact the strong 2025 performance of financial markets had on capital gains realized by individuals and corporations.

— Nominal GDP growth has been adjusted upward (+0.6 percentage points in 2024 and +1.1 percentage points in 2025), reflecting, in particular, the strong performance of wages and salaries (+0.4 percentage points in 2024 and +0.7 percentage points in 2025) and the net operating surplus of corporations (+2.7 percentage points in 2024 and +6.8 percentage points in 2025).

Like Québec, other provinces are also forecasting a favourable adjustment of their own-source revenue<sup>1</sup> in 2025-2026, namely:

— British Columbia (+$1.8 billion or 2.8%), due in part to personal income tax (+$1.4 billion) and corporate taxes (+$1.7 billion);

— Ontario<sup>2</sup> (+$3.0 billion or 1.7%), due in part to personal income tax (+$1.5 billion) and corporate taxes (+$1.0 billion);

— Alberta (+$0.7 billion or 1.2%), due in part to corporate taxes (+$0.7 billion).

In addition, the federal government has adjusted its revenue downward<sup>3</sup> by $6.2 billion (-1.2%) in 2025-2026, due, in particular, to pollution pricing proceeds (-$14.8 billion), partially offset by corporate taxes (+$11.0 billion).

---

| | |
|:---|:---|
| **Own-source revenue - 2025-2026** | **Nominal GDP - 2025** |
| (adjustment as a percentage of revenue) | (adjustment in percentage points) |
| ![](exhibit99-13x003.jpg) | ![](exhibit99-13x004.jpg) |
| Sources: 2026-2027 budgets for British Columbia, Nova Scotia, Alberta and Québec, financial report for the third quarter for Ontario, and the federal government's Budget 2025. | Sources: 2026-2027 budgets for British Columbia, Nova Scotia, Alberta and Québec, update for the second quarter for Ontario, and the federal government's Budget 2025. |

---

1 Own-source revenue excluding revenue from government enterprises.

2 When it releases its 2026-2027 budget, expected on March 26, 2026, Ontario will once again adjust its own-source revenue.

3 Adjustments to the 2025 budget (released in fall 2025) since the *2024 Fall Economic Statement*.

Québec's Financial<br> Situation F-25

------

❏ **Revenue from government enterprises**

For 2025-2026, revenue from government enterprises is adjusted upward<br>by $79 million, to $5.3 billion.

This adjustment is primarily due to increased revenue from Investissement Québec's equity portfolio, as well as Hydro-Québec's higher revenues resulting from higher electricity sales due to cold temperatures in December 2025.

TABLE F.7

---

| | |
|:---|:---|
| **Adjustments to revenue from government enterprises**<br>(millions of dollars) | **Adjustments to revenue from government enterprises**<br>(millions of dollars) |
|  | **2025-2026** |
| **REVENUE FROM GOVERNMENT ENTERPRISES - MARCH 2025** | **5 268** |
| Hydro-Québec | 50 |
| Loto-Québec |  |
| Société des alcools du Québec | -30 |
| Investissement Québec | 65 |
| Société québécoise du cannabis<sup>(1)</sup> | 4 |
| Other<sup>(2)</sup> | -10 |
| **Total adjustments** | **79** |
| **REVENUE FROM GOVERNMENT ENTERPRISES - MARCH 2026** | **5 347** |

---

(1) Revenue is allocated to the Fund to Combat Addiction.

(2) The other government enterprises include the Société ferroviaire et portuaire de Pointe-Noire S.E.C., Capital Financière agricole inc., the Fonds d'investissement Eurêka S.E.C., the Fonds Impulsion S.E.C. and the Société du parc industriel et portuaire de Bécancour. <br>

F-26 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

❏ **Federal transfers** 

In 2025-2026, revenue from federal transfers stands at $30.6 billion, a downward adjustment of $33 million compared to Budget 2025-2026.

This adjustment is due, in particular, to a decrease in health transfers, which is explained by a downward adjustment of Québec's demographic weight reported in Statistics Canada's data published last September.

It is largely offset by an extension of the federal enhancement of loans and bursaries for studies, as well as the pace of realization of federally funded infrastructure projects.<sup>6</sup>

TABLE F.8

---

| | |
|:---|:---|
| **Adjustments to revenue from federal transfers**<br>(millions of dollars) | **Adjustments to revenue from federal transfers**<br>(millions of dollars) |
|  | **2025-2026** |
| **FEDERAL TRANSFERS - MARCH 2025** | **30 610** |
| Equalization |  |
| Health transfers | -257 |
| Transfers for post-secondary education and other social programs | -15 |
| Other programs | 239 |
| **Total adjustments** | **-33** |
| **FEDERAL TRANSFERS - MARCH 2026** | **30 577** |

---

<sup>________________________________________________</sup>

<sup>6</sup> Adjustments to revenue from federal transfers stemming from the pace of realization of federally funded infrastructure projects have no impact on the budgetary balance, as an offsetting entry is recorded in expenditure.

Québec's Financial<br> Situation F-27

------

❏ **Portfolio expenditures** 

For 2025-2026, portfolio expenditures amount to $158.0 billion, which represents an upward adjustment of $1.9 billion compared to the March 2025 forecasts.

The adjustment is due, in particular, to:

— the cost of new initiatives totalling $66 million announced since Budget 2025-2026, primarily to ensure the well-being of more vulnerable individuals;

— the increase in expenditures related to the economic and budgetary situation totalling $1.9 billion, which is due, in particular, to an increase in expenditures of $500 million, or $250 million in the Santé et Services sociaux portfolio and $250 million related to the reinvestment in education announced in summer 2025, and $1.7 billion in advance payments for public transit infrastructure projects, mitigated by a decrease in expenditures of the 2030 Plan for a Green Economy as a result of the decline in anticipated revenue from the carbon market.

TABLE F.9

---

| | |
|:---|:---|
| **Adjustments to portfolio expenditures**<br>(millions of dollars) | **Adjustments to portfolio expenditures**<br>(millions of dollars) |
|  | **2025-2026** |
| **PORTFOLIO EXPENDITURES - MARCH 2025** | **156 102** |
| **New initiatives since March 2025** |  |
| November 2025 | 29 |
| March 2026 | 37 |
| **Subtotal - New initiatives since March 2025** | **66** |
| **Adjustments to the economic and budgetary situation** |  |
| One-time increase in the Éducation portfolio | 250 |
| One-time increase in the Santé et Services sociaux portfolio | 250 |
| Advance payments for public transit infrastructure projects | 1 730 |
| Decrease in expenditures for the 2030 Plan for a Green Economy as a result of the decline in anticipated revenue from the carbon market | -364 |
| Other items | -6 |
| **Subtotal - Adjustments to the economic and budgetary situation** | **1 861** |
| **Total adjustments** | **1 927** |
| **PORTFOLIO EXPENDITURES - MARCH 2026** | **158 029** |
| Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. |

---

F-28 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

❏ **Debt service** 

For 2025-2026, debt service is adjusted upward by $485 million to $10.2 billion, primarily due to higher-than-expected long-term interest rates worldwide.

TABLE F.10

---

| | |
|:---|:---|
| **Adjustments to debt service**<br>(millions of dollars) | **Adjustments to debt service**<br>(millions of dollars) |
|  | **2025-2026** |
| **DEBT SERVICE - MARCH 2025** | **9 670** |
| Interest on direct debt<sup>(1)</sup> | 408 |
| Interest on the liability for retirement plans and other employee future benefits<sup>(2)</sup> | 77 |
| **Total adjustments** | **485** |
| **DEBT SERVICE - MARCH 2026** | **10 155** |

---

(1) Interest on direct debt includes the revenue of the Sinking Fund for Government Borrowing. This revenue, which is deducted from debt service, consists of interest generated on investments as well as gains and losses on disposal. The forecast for this revenue may be adjusted upward or downward since it is closely tied to changes in interest rates and market behaviour.

(2) This corresponds to the interest on obligations relating to the retirement plans and other future benefits of public and parapublic sector employees, minus mainly the investment income of the Retirement Plans Sinking Fund. <br>

Québec's Financial<br> Situation F-29

------

![](exhibit99-13xu003.jpg)

**2. RETURNING TO A BALANCED BUDGET**

The government remains committed to consolidating public finances. Returning to a balanced budget contributes to the preservation of intergenerational equity and to the government's long-term ability to ensure the delivery of public services.

— This process is subject to the *Balanced Budget Act* and the *Act to reduce the debt and establish the Generations Fund*.

This return to a balanced budget must, however, be achieved at a pace compatible with the tense economic situation that is fraught with uncertainty stemming from the trade dispute started by the United States.

In Budget 2025-2026, the government presented a plan to gradually eliminate, by 2029-2030, the deficit of $13.6 billion projected for 2025-2026, after deposits of dedicated revenues in the Generations Fund.

Budget 2026-2027 marks the second year of implementation of this five-year plan and shows better-than-expected results. This situation:

— demonstrates the government's commitment to consolidating public finances through a gradual, measured reduction in the share of expenditure in the economy, while maintaining increased funding for public infrastructure and the government's main missions;

— confirms that the path for restoring fiscal balance, as mapped out in the plan, is in line with budgetary reality and will enable the deficits to be eliminated by 2029-2030.

Compared to Budget 2025-2026, the budgetary deficit within the meaning of the *Balanced Budget Act*, namely after deposits of dedicated revenues in the Generations Fund, is adjusted downward by $3.7 billion in 2025-2026 and $916 million in 2026-2027. The government is thus taking another step toward achieving a balanced budget in 2029-2030.

Québec's Financial<br> Situation F-31

------

❏ **A gradual, measured reduction in the share of expenditure**

In 2020-2021, during the COVID-19 pandemic, government expenditure as a proportion of GDP peaked at 28.2%. To return to a balanced budget, the government has committed to reducing the share of expenditure in the economy to 24.4%, which is the pre-pandemic level of 2018-2019.

— This reduction corresponds to a decrease of 3.8 percentage points in the share of expenditure.

Through a strong post-pandemic economic recovery and responsible management of public finances, the share of expenditure has gradually decreased. Budget 2026-2027 continues along this path by limiting the growth in portfolio expenditures projected for 2026-2027 to 1.6%, while ensuring the funding of the government's main missions.

By 2026-2027, the government will have achieved more than two thirds of its target by reducing the share of expenditure in the economy by 2.6 percentage points compared to its peak in 2020-2021.

In accordance with the restoration plan, the government will continue its efforts to stimulate economic growth and moderate growth in expenditure in order to reduce the share of expenditure by 1.2 percentage points and thus achieve a balanced budget.

---

| |
|:---|
| CHART F.2<br>**Change in the share of total expenditure in the economy** |
| (percentage of GDP) |
| ![](exhibit99-13x005.jpg) |

---

F-32 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu003.jpg)

**Policy directions governing the plan to restore fiscal balance**

The purpose of the *Balanced Budget Act* is to balance the government's budget.<br>In particular, the Act provides for the presentation of a plan to restore fiscal balance when the budgetary deficit reported for a given fiscal year exceeds the dedicated revenues in the Generations Fund for that year.

Since the budgetary deficit recorded in the *Public Accounts 2022-2023*, tabled on December 11, 2023, was $6.1 billion within the meaning of the Act and exceeded the dedicated revenues in the Generations Fund, which amounted to $3.1 billion, the government tabled, in Budget 2025-2026, a plan to restore fiscal balance that meets the following objectives:

— a return to a balanced budget over a maximum period of five years, namely by 2029-2030;

— shrinking deficits over the period covered by the financial framework;

— a maximum deficit of $1.5 billion in 2028-2029, corresponding to 25% of the $6.1-billion budgetary deficit recorded in the *Public Accounts 2022-2023*.

The *Balanced Budget Act* requires a return to a balanced budget by 2029-2030. When large deficits are not eliminated, they limit the government's long-term ability to deliver public services, ensure intergenerational equity and respond to unforeseen economic shocks.

— This return to a balanced budget must, however, be achieved at a pace compatible with the current economic situation.

The restoration plan tabled in Budget 2025-2026 is thus in line with the following key policy directions:

— achieving and then maintaining a balanced budget;

— reducing the share of expenditure in the economy to a level similar to the pre-pandemic level;

— maintaining deposits of dedicated revenues in the Generations Fund and a long-term debt reduction objective;

— stimulating economic growth and narrowing the wealth gap with Ontario;

— adequately funding the government's missions;

— continuing to make infrastructure investments. <br>

Québec's Financial<br> Situation F-33

------

2.1 **The path for returning to a balanced budget**

In Budget 2026-2027, the government demonstrates its ability to ensure sound management of public finances and shows an improvement in the deficit expected in 2025-2026, together with a reduction in its projected deficits as of 2026-2027.

— Compared to Budget 2025-2026, the budgetary deficit within the meaning of the *Balanced Budget Act*, after deposits of dedicated revenues in the Generations Fund, is adjusted downward by $3.7 billion in 2025-2026 and $916 million in 2026-2027.

The government is on the right track and is maintaining its path for returning to a balanced budget by 2029-2030.

---

| |
|:---|
| CHART F.3<br>**Path for returning to a balanced budget** |
| (billions of dollars) |
| ![](exhibit99-13x006.jpg) |

---

F-34 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

❏ **Bridging a gap over time**

The resilience of the economy and its favourable outlook reflected in Budget 2026-2027 facilitate an initial reduction in the projected gap to be bridged in the financial framework as of 2027-2028.

A gap to be bridged of $750 million in 2027-2028, $2.3 billion in 2028-2029 and $2.0 billion in 2029-2030 remains projected in the financial framework and will need to be bridged to achieve balance after deposits of dedicated revenues in the Generations Fund.

Once the uncertainty mainly related to CUSMA negotiations dissipates, the economic situation should recover and allow for the gaps to be bridged.

---

| |
|:---|
| CHART F.4<br>**Path for returning to a balanced budget** |
| (billions of dollars) |
| ![](exhibit99-13x007.jpg) |
| Note: Budgetary balance within the meaning of the *Balanced Budget Act*. |

---

Québec's Financial<br> Situation F-35

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2.2 **The continuity of services and the sustainability of public finances**

Achieving a balanced budget is an essential condition for the long-term sustainability of public finances and for controlling the change in the debt burden.

❏ **The benefits of sound management of public finances**

The sound management of public finances fosters a climate of confidence conducive to private investment, economic growth and higher productivity. Achieving a balanced budget is essential to the government's debt burden reduction strategy and to public and investor confidence. It sends a message to individuals and businesses that the tax burden, which has been reduced since 2018, will remain stable over time.

By ensuring greater intergenerational equity, reducing the debt burden also guarantees sustainable funding for essential government missions, such as health and social services and education, while meeting the challenges of an aging population and climate change.

Moreover, it paves the way for crucial investments in public infrastructure and strengthens Québec's ability to cope with future economic crises. The sound management of public finances thus provides a solid foundation for collective wealth and sustainable prosperity.

F-36 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

❏ **Impact of the plan to restore fiscal balance on the sustainability of public finances**

Trends in the various indicators of public finance sustainability show that the plan to restore fiscal balance will have a favourable impact on Québec's public finances, allowing for a favourable comparison of the future situation with that of 2018-2019, that is, before the start of the pandemic.

In Budget 2026-2027, the government is maintaining its path for restoring balance and it is on track to improve many sustainability indicators, as projected during the development of the plan to restore fiscal balance.

— The share of revenue as a proportion of GDP will be lower in 2029-2030 (24.6%) than it was in 2018-2019 (26.1%).

— The plan to restore fiscal balance will also make it possible to reduce the share of expenditure as a proportion of GDP, and to return to a level similar to that before the pandemic.

— The initiatives taken as part of the plan to restore fiscal balance will make it possible to reduce the debt burden as a proportion of GDP and to ensure that debt-servicing costs as a proportion of revenue remain at historically low levels.

— A low debt-servicing cost as a proportion of revenue provides leeway to better fund public services. Through these initiatives, the proportion of revenue devoted to debt service will remain at historically low levels (6.4% in 2029-2030), thus preserving the government's budgetary flexibility.

TABLE F.11

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Impact of the plan to restore fiscal balance on indicators of public finance sustainability, viability and budgetary flexibility**<br>(per cent, gap and change in percentage points) | **Impact of the plan to restore fiscal balance on indicators of public finance sustainability, viability and budgetary flexibility**<br>(per cent, gap and change in percentage points) | **Impact of the plan to restore fiscal balance on indicators of public finance sustainability, viability and budgetary flexibility**<br>(per cent, gap and change in percentage points) | **Impact of the plan to restore fiscal balance on indicators of public finance sustainability, viability and budgetary flexibility**<br>(per cent, gap and change in percentage points) | **Impact of the plan to restore fiscal balance on indicators of public finance sustainability, viability and budgetary flexibility**<br>(per cent, gap and change in percentage points) | **Impact of the plan to restore fiscal balance on indicators of public finance sustainability, viability and budgetary flexibility**<br>(per cent, gap and change in percentage points) |
|  |  | **2029-2030** | **2029-2030** | **2029-2030** |  |
|  | **2018-**<br>**2019** | **Without<br>restoration plan** | **With**<br>**restoration plan<sup>(</sup>**<sup>**1)**</sup> | **Gap** | **Change<br>compared to<br>2018-2019** |
| Revenue as a proportion of GDP | 26.1 | 24.4 | 24.6 | 0.2 | -1.5 |
| Expenditure as a proportion of GDP | 24.4 | 24.8 | 24.3 | -0.5 | -0.0 |
| Debt-servicing costs as a proportion of revenue | 7.7 | 6.8 | 6.4 | -0.4 | -1.3 |
| Net debt as a proportion of GDP | 42.9 | 40.5 | 37.9 | -2.6 | -5.0 |

---

Notes: Differences may not add due to rounding.<br>The grey boxes are those showing a favourable impact on sustainability indicators.

(1) The gap to be bridged and the contingency reserve are not included in the calculation of ratios of revenue and expenditure as a proportion of GDP. <br>

Québec's Financial<br> Situation F-37

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**Follow-up on the plan to restore fiscal balance**

In accordance with the *Balanced Budget Act*, in Budget 2025-2026, the government tabled its plan to restore fiscal balance, according to which balance will be achieved by 2029-2030 at the latest, after deposits of dedicated revenues in the Generations Fund.

This budget marks the second year of implementation of this plan and demonstrates the positive progress in several budget indicators.

---

| | |
|:---|:---|
| **Follow-up on key indicators for implementing the plan to restore fiscal balance** | **Follow-up on key indicators for implementing the plan to restore fiscal balance** |
| **Indicator** | **Indicator status** |
| ***Sustainability*** | ***Sustainability*** |
| Deficit as a proportion<br>of GDP | In 2025-2026, the federal government and all Canadian provinces showed a deficit. Québec's deficit as a percentage of GDP, at 1.2%, was among the lowest. Only Saskatchewan, Alberta and Ontario had lower deficits as a proportion of GDP.<br>In 2026-2027, Québec's deficit ratio is further reduced to 0.9%. |
| Debt as a proportion<br>of GDP | The government aims to reduce its net debt burden to 35.5% of GDP by 2032-2033 and to 32.5% of GDP by 2037-2038.<br>As at March 31, 2026, Québec's net debt will represent 38.8% of GDP, a decrease of 4.1 percentage points from the level of 42.9% as at March 31, 2019, making Québec one of the only provinces, along with Ontario and New Brunswick, to have reduced its indebtedness during this period. |
| Expenditure as a proportion<br>of GDP<sup>(1)</sup> | The government aims to reduce the share of expenditure to a ratio of 24.4% in 2029-2030 in order to return to a pre-pandemic level compatible with a balanced budget.<br>With growth in portfolio expenditures limited to 1.6% for 2026-2027, the expenditure-to-GDP ratio is at 25.6%, a decrease of 2.6 percentage points from the peak reached in 2020-2021 during the COVID-19 pandemic. |
| ***Budget management levers*** | ***Budget management levers*** |
| Generations Fund | Unique to Québec, the Generations Fund is a fiscal policy instrument that imposes a stricter definition of budgetary balance compared to other provinces.<br>Deposits of dedicated revenues in the Generations Fund help reduce debt and, despite the deficit, Québec is maintaining its deposits. These amount to $2.3 billion in 2026-2027. Over the five years of the return to a balanced budget, these deposits total $12.5 billion. |
| Gap to be bridged | To achieve a balanced budget, after deposits of dedicated revenues in the Generations Fund, the government provides for a gap to be bridged. In Budget 2026-2027, this gap was reduced by $250 million in 2027-2028 and 2028-2029 and by $500 million in 2029-2030. These will be bridged once the economic uncertainty has dissipated. |
| Contingency reserve | The financial framework maintains a significant contingency reserve totalling $8.0 billion over five years, with $2.0 billion in 2026-2027 and $1.5 billion per year starting in 2027-2028.<br>This reserve could be used to cover unforeseen expenditures or mitigate the effects of more-moderate-than-expected economic growth. Should it not be required, this reserve would then improve the budgetary balance. |

---

(1) The ratio of expenditure as a proportion of GDP expresses the draw on the economy required to fund expenditures. A low ratio indicates greater sustainability.

F-38 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

❏ **Taking action on the shares of revenue and expenditure in the economy**

The shares of government revenue and expenditure in the economy generally follow similar paths.

In 2026-2027, the share of revenue in the economy stands at 25.0%, below the share of expenditure, which amounts to 25.6% of GDP.

— The decline in the share of revenue in the economy, from 26.1% in 2018-2019 to 25.0% in 2026-2027, is due in particular to the measures implemented by the government to return money to Quebecers, such as the tax reduction announced in Budget 2023-2024 and government contributions to limit school tax increases.

— The increase in the share of expenditure in the economy, from 24.4% in 2018-2019 to 25.6% in 2026-2027, results from government investments to fund public services, such as health and social services and education. It is also linked to actions taken since 2018 to reduce Quebecers' tax burden, such as the increases in the senior assistance amount announced in 2021 and 2022.

This gap will gradually be eliminated to maintain sound public finances over the long term.

— With the plan to restore fiscal balance, including measures for revenue and expenditure, the share of expenditure in the economy will gradually decline to 24.3% in 2030-2031, while that of revenue will stand at 24.7% in the same year.

---

| |
|:---|
| CHART F.5<br>**Shares of revenue and expenditure in the economy** |
| (percentage of GDP) |
| ![](exhibit99-13x008.jpg) |

---

Québec's Financial<br> Situation F-39

------

**Limited growth in tax expenditures**

When Budget 2024-2025 was released, the government announced that it would conduct a rigorous review of tax expenditures, covering measures related to personal and corporate income taxes, as well as consumption taxes.

Changes have since been made to several tax expenditures with a view to increasing the efficiency of the system and reducing its costs, for example:

— establishing the tax credit for research, innovation and commercialization to replace eight tax measures;

— adjusting tax credits supporting labour-intensive information technology sectors;

— optimizing the tax credit for career extension.

The review of tax expenditures has therefore helped control costs. Their growth from 2025 to 2026 is thus estimated at only 2.2%, whereas from 2020 to 2025, the cost of tax expenditures grew at an average annual rate of 7.1%.

This exercise has helped limit the growth in tax expenditures and will contribute to the return to a balanced budget, and thus a reduction in debt burden.

---

| |
|:---|
| **Change in tax expenditures** |
| (billions of dollars, unless otherwise indicated) |
| ![](exhibit99-13xu004.jpg) |
| Note: Totals may not add due to rounding. |

---

F-40 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp; **Review of budgetary expenditures** |
| &nbsp;&nbsp; The review of budgetary expenditures identified concrete measures to reduce expenditures that will extend over several years and will have a total impact of $3.0 billion in 2029-2030.<br> This review, which focuses on the efficiency of government intervention, will identify reductions in expenditure in four main categories, including:<br> — optimization of administrative expenditures and processes;<br> — capping independent labour rates in the health and social services sector;<br> — updating certain programs;<br> — transforming the way the government operates.<br> These actions will help improve government efficiency, maintain sustainable growth in expenditures and ensure a gradual return to a balanced budget by 2029-2030.<br> Furthermore, considering that remuneration represents a significant portion of expenditures, the government is continuing, in a gradual and responsible manner, to reduce the size of government, a process that began in fiscal year 2025-2026. These efforts will continue during fiscal year 2026-2027. |

---

Québec's Financial<br> Situation F-41

------

![](exhibit99-13xu001.jpg)

**3. REVENUE AND EXPENDITURE FORECASTS**

Budget 2026-2027 presents the short-term change in revenue and expenditure, that is, the budgetary outlook over three years, from 2025-2026 to 2027-2028.

TABLE F.12

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Change in revenue and expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue and expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue and expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue and expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue and expenditure**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| **Revenue** |  |  |  |  |
| Own-source revenue excluding revenue from government enterprises | 124 605 | 128 508 | 133 366 |  |
|  *% change* | *3.9* | *3.1* | *3.8* | *3.6* |
| Revenue from government enterprises | 5 347 | 5 853 | 6 442 |  |
|  *% change* | *-6.0* | *9.5* | *10.1* | *4.2* |
| Federal transfers | 30 577 | 32 131 | 32 948 |  |
|  *% change* | *0.3* | *5.1* | *2.5* | *2.6* |
| **Total revenue** | **160 529** | **166 492** | **172 756** |  |
| ***% change*** | ***2.8*** | ***3.7*** | ***3.8*** | ***3.4*** |
| **Expenditure** |  |  |  |  |
| Portfolio expenditures | -158 029 | -160 489 | -164 279 |  |
|  *% change* | *4.5* | *1.6* | *2.4* | *2.8* |
| Debt service | -10 155 | -10 268 | -10 931 |  |
|  *% change* | *1.9* | *1.1* | *6.5* | *3.1* |
| **Total expenditure** | **-168 184** | **-170 757** | **-175 210** |  |
| ***% change*** | ***4.3*** | ***1.5*** | ***2.6*** | ***2.8*** |
| Contingency reserve |  | -2 000 | -1 500 |  |
| **ACCOUNTING SURPLUS (DEFICIT)** | **-7 655** | **-6 265** | **-3 954** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***1.2*** | ***0.9*** | ***0.6*** |  |
| (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. |

---

Québec's Financial<br> Situation F-43

------

3.1 **Change in revenue**

Government revenue encompasses own-source revenue, including revenue from government enterprises, as well as revenue from federal transfers.

Government revenue stands at $160.5 billion in 2025-2026, being $130.0 billion in own-source revenue and $30.6 billion in federal transfers.

— In 2025-2026, own-source revenue represents 81.0% of government revenue, while revenue from federal transfers represents 19.0%.

Government revenue will stand at $166.5 billion in 2026-2027 and $172.8 billion in 2027-2028, representing growth of 3.7% and 3.8%, respectively.

TABLE F.13<br>**Change in revenue**

---

| | | | | |
|:---|:---|:---|:---|:---|
| (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) | (millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| **Own-source revenue** |  |  |  |  |
| Own-source revenue excluding revenue from government enterprises | 124 605 | 128 508 | 133 366 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(2),(3)*</sup> | *3.9* | *3.1* | *3.8* | *3.6* |
| Revenue from government enterprises | 5 347 | 5 853 | 6 442 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(4)*</sup> | *-6.0* | *9.5* | *10.1* | *4.2* |
| **Subtotal** | **129 952** | **134 361** | **139 808** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***3.5*** | ***3.4*** | ***4.1*** | ***3.6*** |
| Federal transfers | 30 577 | 32 131 | 32 948 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *0.3* | *5.1* | *2.5* | *2.6* |
| **TOTAL** | **160 529** | **166 492** | **172 756** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***2.8*** | ***3.7*** | ***3.8*** | ***3.4*** |

---

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028.

(2) In 2026-2027, the growth in own-source revenue excluding revenue from government enterprises is due in particular to the 3.5% change in nominal GDP in 2026 and the impact of the implementation of a temporary holiday from contributions to the Health Services Fund in 2026 and 2027.

(3) In 2027-2028, the growth in own-source revenue excluding revenue from government enterprises is mainly due to the 3.4% change in nominal GDP in 2027 and the impact of harmonization with the accelerated depreciation and expensing measures announced in the 2024 federal budget.

(4) The growth observed in 2026-2027 and 2027-2028 is mainly due to the increase in Hydro-Québec's results, stemming, in particular, from higher export volumes with the commissioning of infrastructure related to two major contracts for the sale of electricity to the United States. <br>

F-44 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

3.1.1 **Own-source revenue excluding revenue from government enterprises** 

Own-source revenue excluding revenue from government enterprises consists mainly of tax revenue, including personal income tax, contributions for health services, corporate taxes, school property tax and consumption taxes.

— Changes in tax revenue generally reflect changes in economic activity in Québec and changes made to the tax systems.

Own-source revenue also includes other sources of revenue, namely:

— duties, permits and royalties, including revenue from the carbon market;

— miscellaneous revenue, such as revenue from services rendered<sup>7</sup> and income on accounts receivable, loans and investments.

In 2025-2026, own-source revenue stands at $124.6 billion, an increase of 3.9% compared to 2024-2025. It will reach $128.5 billion in 2026-2027 and $133.4 billion in 2027-2028, growing by 3.1% and 3.8%, respectively.

TABLE F.14

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Change in own-source revenue excluding revenue from government enterprises - Summary**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises - Summary**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises - Summary**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises - Summary**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises - Summary**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| Tax revenue | 102 899 | 106 058 | 110 142 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(2),(3),(4)*</sup> | *5.6* | *3.1* | *3.9* | *4.2* |
| Other revenue | 21 706 | 22 450 | 23 224 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(5)*</sup> | *-3.3* | *3.4* | *3.4* | *1.1* |
| **TOTAL** | **124 605** | **128 508** | **133 366** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***3.9*** | ***3.1*** | ***3.8*** | ***3.6*** |

---

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028.

(2) In 2025-2026, the growth in tax revenue is mainly due to the 4.5% change in nominal GDP in 2025 and increased efforts by Revenu Québec to combat tax evasion.

(3) In 2026-2027, the growth in tax revenue is due in particular to the 3.5% change in nominal GDP in 2026 and the impact of the implementation of a temporary holiday from contributions to the Health Services Fund in 2026 and 2027 to support the agriculture, forestry and fishing sectors.

(4) In 2027-2028, the growth in tax revenue is mainly due to the 3.4% change in nominal GDP in 2027 and the impact of harmonization with the accelerated depreciation and expensing measures announced in the 2024 federal budget.

(5) In 2025-2026, the change in other revenue is due to the non-recurrence of a significant portion of the amount of $1.7 billion received by the Québec government in 2024-2025 to offset smoking-related health costs under the plan of arrangement between the tobacco companies and their creditors.

<sup>________________________________________________</sup>

<sup>7</sup> Revenue from services rendered includes, in particular, health care facility accommodation fees, prescription drug insurance premiums and tuition fees.

Québec's Financial<br> Situation F-45

------

❏ **Tax revenue**

In 2025-2026, revenue from personal income tax, the government's main revenue source, stands at $49.0 billion, an increase of 7.3% compared to 2024-2025. It will reach $50.8 billion in 2026-2027 and $52.7 billion in 2027-2028, growing by 3.7% each year.

Among other things, this change in revenue from personal income tax reflects:

— the increase in household income, including wages and salaries, which grew by 4.4% in 2025 and will grow by 3.0% in 2026 and 3.5% in 2027, as well as the increase in capital gains realized by taxpayers tied to the strong performance of financial markets in 2025;

— the high level of source deductions and instalment payments seen since the start of 2025-2026;

— all the parameters of the personal income tax system, such as indexation and the progressive nature of the income tax system;

— the effect of optimizing the tax credit for career extension as of 2025-2026, announced in the *Update on Québec's Economic and Financial Situation - Fall 2024*.

In 2025-2026, contributions for health services stand at $9.2 billion, representing an increase of 3.6%. They will reach $9.4 billion in 2026-2027 and $9.7 billion in 2027-2028, representing growth of 2.6% and 3.6%, respectively.

Among other things, this change in contributions for health services reflects:

— the growth in wages and salaries, which stands at 4.4% in 2025 and is expected to be 3.0% in 2026 and 3.5% in 2027;

— the effect of the end of indexation of the eligibility threshold<sup>8</sup> for reduced rates of the employer contribution to the Health Services Fund, announced in Budget 2025-2026, which contributes to growth in revenue;

— the effect of the implementation of a temporary holiday from contributions to the Health Services Fund in 2026 and 2027 to support the agricultural, forestry and fishing sectors, which are essential to the vitality of the regions.

<sup>________________________________________________</sup>

<sup>8</sup> This threshold will be maintained at $7.8 million.

F-46 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

In 2025-2026, revenue from corporate taxes stands at $14.1 billion, growing by 5.7% compared to 2024-2025. It will stand at $14.5 billion in 2026-2027 and $15.3 billion in 2027-2028, growing by 3.0% and 5.3%, respectively.

The change in revenue from corporate taxes reflects, in particular:

— the growth in the net operating surplus of corporations, which stands at 5.7% in 2025 and is expected to be 3.7% in 2026 and 3.1% in 2027;<sup>9</sup>

— the increase in capital gains realized by corporations tied to the strong performance of financial markets in 2025;

— the effect of harmonization with the accelerated depreciation measures announced by the federal government since the 2024 budget;

— greater efforts by Revenu Québec to combat tax evasion.

In 2025-2026, revenue from the school property tax stands at $1.3 billion, an increase of 4.9% compared to 2024-2025. It will reach $1.3 billion in 2026-2027 and $1.4 billion in 2027-2028, growing by 4.5% and 9.5%, respectively.

— This increase is influenced by changes in the amount for the funding of local needs, which considers the projected growth in the student population and in the cost of goods and services funded by the school property tax.

— It also reflects the impact of the additional contribution from the Québec government to limit the increase in school taxes to 3% on average for 2025-2026 and 2026-2027.

In 2025-2026, revenue from consumption taxes totals $29.4 billion, an increase of 3.5% compared to 2024-2025. It will stand at $30.0 billion in 2026-2027 and $31.0 billion in 2027-2028, increases of 2.2% and 3.2%, respectively.

The change in revenue from consumption taxes reflects, in particular:

— the increase in household consumption<sup>10</sup> which stands at 2.6% in 2025 and is expected to reach 2.7% in 2026 and 3.3% in 2027;

— the growth in residential construction investment, which stands at 14.2% in 2025 and is expected to be 3.4% in 2026 and 1.2% in 2027;

— the harmonization of the tax rate on insurance premiums and that of the QST starting on January 1, 2027, announced in Budget 2025-2026.

<sup>________________________________________________</sup>

<sup>9</sup> The change in revenue from corporate taxes also reflects the growth in total exports, which stands at 0.7% in 2025, 2.2% in 2026 and 3.5% in 2027.

<sup>10</sup> Household consumption excluding food expenditures and shelter.

Québec's Financial<br> Situation F-47

------

TABLE F.15

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Change in own-source revenue excluding revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in own-source revenue excluding revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| **Tax revenue** |  |  |  |  |
| Personal income tax | 49 003 | 50 800 | 52 687 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(2)*</sup> | *7.3* | *3.7* | *3.7* | *4.9* |
| Contributions for health services | 9 175 | 9 412 | 9 749 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(3)*</sup> | *3.6* | *2.6* | *3.6* | *3.3* |
| Corporate taxes | 14 102 | 14 527 | 15 296 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(4),(5),(6)*</sup> | *5.7* | *3.0* | *5.3* | *4.7* |
| School property tax | 1 255 | 1 311 | 1 435 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(7)*</sup> | *4.9* | *4.5* | *9.5* | *6.3* |
| Consumption taxes | 29 364 | 30 008 | 30 975 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(8)*</sup> | *3.5* | *2.2* | *3.2* | *3.0* |
| **Subtotal** | **102 899** | **106 058** | **110 142** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***5.6*** | ***3.1*** | ***3.9*** | ***4.2*** |
| **Other revenue** |  |  |  |  |
| Duties, permits and royalties | 6 311 | 6 542 | 6 939 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(9),(10)*</sup> | *1.9* | *3.7* | *6.1* | *3.9* |
| Miscellaneous revenue | 15 395 | 15 908 | 16 285 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(11)*</sup> | *-5.3* | *3.3* | *2.4* | *0.1* |
| **Subtotal** | **21 706** | **22 450** | **23 224** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***-3.3*** | ***3.4*** | ***3.4*** | ***1.1*** |
| **TOTAL** | **124 605** | **128 508** | **133 366** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***3.9*** | ***3.1*** | ***3.8*** | ***3.6*** |

---

Note: Totals may not add due to rounding.

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028.

(2) In 2025-2026, the growth in revenue from personal income tax is due to the 4.4% increase in wages and salaries in 2025, the impact of the 2025 financial market performance on capital gains realized by taxpayers, and the high level of source deductions and instalment payments seen since the start of 2025-2026.

(3) In 2026-2027, the growth in contributions for health services is due to the 3.0% increase in wages and salaries in 2026 and the effect of the implementation of a temporary holiday from contributions to the Health Services Fund in 2026 and 2027 to support the agricultural, forestry and fishing sectors.

(4) In 2025-2026, the growth in corporate tax revenue is due, in particular, to the 5.7% increase in the net operating surplus of corporations in 2025.

(5) In 2026-2027, the growth in revenue from corporate taxes is due to the 3.7% increase in the net operating surplus of corporations in 2026 and the impact of harmonization with the expensing measures announced by the federal government in the 2025 fall budget.

(6) In 2027-2028, the growth in revenue from corporate taxes is due, in particular, to the 3.1% increase in the net operating surplus of corporations in 2027 and harmonization with the accelerated depreciation and expensing measures announced in the 2024 federal budget.

(7) The growth in revenue from school property tax is influenced by changes in the amount for the funding of local needs, which considers the projected growth in the student population and in the cost of goods and services funded by the school property tax.

(8) In 2026-2027, the growth in consumption taxes is due to the 2.7% increase in household consumption, excluding food expenditures and shelter in 2026, and a return to normal input tax refunds, due to the recovery in the production pace of businesses.

(9) In 2025-2026, the growth in revenue from duties, permits and royalties is due, in particular, to the expected increase in revenue from natural resources, mainly mining revenue, the effect of which is partially offset by the decline in revenue from the carbon market.

(10) In 2027-2028, the growth in revenue from duties, permits and royalties is due, in particular, to the expected increase in revenue from the carbon market.

(11) In 2025-2026, the change in miscellaneous revenue is due, in particular, to the non-recurrence of a significant portion of the amount of $1.7 billion received in 2024-2025 to offset smoking-related health costs under the plan of arrangement between tobacco companies and their creditors.

F-48 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

❏ **Other revenue**

In 2025-2026, revenue from duties, permits and royalties amounts to $6.3 billion, an increase of 1.9% compared to 2024-2025. It will stand at $6.5 billion in 2026-2027 and $6.9 billion in 2027-2028, increases of 3.7% and 6.1%, respectively.

— The change in revenue from duties, permits and royalties is due to the change in revenue from natural resources and from the carbon market.

In 2025-2026, miscellaneous revenue stands at $15.4 billion, a decline of 5.3% compared to 2024-2025. It will reach $15.9 billion in 2026-2027 and $16.3 billion in 2027-2028, growing by 3.3% and 2.4%, respectively.

The change in miscellaneous revenue reflects, in particular:

— the non-recurrence of a significant portion of the amount of $1.7 billion received by the Québec government in 2024-2025 to offset smoking-related health costs under the plan of arrangement between the tobacco companies and their creditors;

— the change in investment income of the Generations Fund;

— the anticipated revenue of special funds, non-budget-funded bodies, and bodies in the education and higher education networks.

— For example, the growth in the revenue of the higher education networks is influenced by, among other things, the change in clientele.

Québec's Financial<br> Situation F-49

------

3.1.2 **Revenue from government enterprises**

Government enterprises consist of commercial corporations held by the government, which have managerial autonomy and are financially self-sufficient. Revenue from government enterprises corresponds in large part to the net earnings of these corporations.

This revenue stands at $5.3 billion in 2025-2026, a decrease of 6.0%, $5.9 billion in 2026-2027, an increase of 9.5%, and $6.4 billion in 2027-2028, an increase of 10.1%.

TABLE F.16

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Change in revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) | **Change in revenue from government enterprises**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| Hydro-Québec | 1 955 | 2 445 | 2 905 |  |
| Loto-Québec | 1 517 | 1 557 | 1 643 |  |
| Société des alcools du Québec | 1 389 | 1 406 | 1 391 |  |
| Investissement Québec | 333 | 292 | 344 |  |
| Société québécoise du cannabis<sup>(2)</sup> | 130 | 146 | 147 |  |
| Other<sup>(3)</sup> | 23 | 7 | 12 |  |
| **TOTAL** | **5 347** | **5 853** | **6 442** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***-6.0*** | ***9.5*** | ***10.1*** | ***4.2*** |

---

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028.

(2) Revenue is allocated to the Fund to Combat Addiction.

(3) The other government enterprises include the Société ferroviaire et portuaire de Pointe-Noire S.E.C., Capital Financière agricole inc., the Fonds d'investissement Eurêka S.E.C., the Fonds Impulsion S.E.C. and the Société du parc industriel et portuaire de Bécancour.

The 6.0% decrease in 2025-2026 is due, in particular, to the decline in Hydro-Québec's results, primarily tied to low runoff.

— Since 2023, Hydro-Québec has had to contend with low runoff, as natural water inflows have been below normal overall, significantly affecting its reservoir levels, its surplus generation capacity and consequently its revenue.

The growth observed in 2026-2027 and 2027-2028 is mainly due to the increase in Hydro-Québec's results, stemming, in particular, from higher export volumes with the commissioning of infrastructure related to two major contracts for the sale of electricity to the United States.

F-50 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

**Additional efficiency measures by Investissement Québec**

Since 2025-2026, the main government enterprises have been required to make efficiency efforts totalling $1.8 billion by 2030-2031 to improve their financial results with the aim of bolstering the reduction in the budgetary deficit.

In Budget 2026-2027, Investissement Québec is being requested to make an additional contribution toward a return to a balanced budget by taking further steps to generate $150 million over five years.

— This announcement aims to encourage establishment of a revenue trajectory that better aligns with the deficit reduction imperatives.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) | **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) | **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) | **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) | **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) | **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) | **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) | **Additional efficiency measures requested from Investissement Québec**<br>(millions of dollars) |
|  | **2025-**<br>**2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **Total** |
| Additional earnings<sup>(1)</sup> | - | 20 | 30 | 30 | 35 | 35 | 150 |
| (1) The amounts shown have been included in the forecasts of revenue from government enterprises. | (1) The amounts shown have been included in the forecasts of revenue from government enterprises. | (1) The amounts shown have been included in the forecasts of revenue from government enterprises. | (1) The amounts shown have been included in the forecasts of revenue from government enterprises. | (1) The amounts shown have been included in the forecasts of revenue from government enterprises. | (1) The amounts shown have been included in the forecasts of revenue from government enterprises. | (1) The amounts shown have been included in the forecasts of revenue from government enterprises. | (1) The amounts shown have been included in the forecasts of revenue from government enterprises. |

---

Québec's Financial<br> Situation F-51

------

3.1.3 **Federal transfers**

Revenue from federal transfers consists of federal government revenue paid to Québec under the *Federal-Provincial Fiscal Arrangements Act*, to which is added revenue from other programs under bilateral agreements.

It mainly includes equalization and revenue from the Canada Health Transfer (CHT) and the Canada Social Transfer (CST).

Revenue from federal transfers is expected to increase by 0.3% in 2025-2026 and 5.1% in 2026-2027. The growth in 2026-2027 is due, in particular, to the minimal growth in the CHT of 5.0% across Canada.

Over five years, from 2026-2027 to 2030-2031, average annual growth will, however, be limited to 1.7%.

TABLE F.17

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) | **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) | **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) | **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) | **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) | **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) | **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) | **Change in federal transfers**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **AAGR<sup>(1)</sup>** |
| Equalization | 13 567 | 13 907 | 14 623 | 14 635 | 14 787 | 15 213 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *1.9* | *2.5* | *5.1* | *0.1* | *1.0* | *2.9* | *2.3* |
| Health transfers | 8 685 | 9 265 | 9 413 | 9 539 | 9 811 | 10 106 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *3.0* | *6.7* | *1.6* | *1.3* | *2.9* | *3.0* | *3.1* |
| Transfers for post-secondary education and other social programs | 1 315 | 1 392 | 1 396 | 1 404 | 1 411 | 1 420 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *-2.6* | *5.9* | *0.3* | *0.6* | *0.5* | *0.6* | *1.5* |
| Other programs | 7 010 | 7 567 | 7 516 | 7 444 | 6 328 | 6 586 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change*<sup>*(2)*</sup> | *-5.3* | *7.9* | *-0.7* | *-1.0* | *-15.0* | *4.1* | *-1.2* |
| **TOTAL** | **30 577** | **32 131** | **32 948** | **33 022** | **32 337** | **33 325** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***0.3*** | ***5.1*** | ***2.5*** | ***0.2*** | ***-2.1*** | ***3.1*** | ***1.7*** |

---

(1) Average annual growth rate, corresponding to the geometric mean over five years, from 2026-2027 to 2030-2031.

(2) Other programs include revenue from federal transfers under Canada-Québec agreements. They include, in particular, the Canada-Québec immigration agreement, the early learning and childcare agreement, labour market transfer agreements, as well as the compensation Québec receives related to the Canada Student Financial Assistance Program. They also include revenue from federal transfers related to housing and infrastructure agreements. The decline forecast for 2029-2030 is due to lower infrastructure transfers. <br>

F-52 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

❏ **Federal transfers will have weak growth over the next five years**

Weak growth in federal transfers is expected between now and 2030-2031. Over five years, from 2026-2027 to 2030-2031, an average annual growth rate of 1.7% is anticipated. This contrasts with an average annual growth rate for the past 10 years, from 2016-2017 to 2025-2026, of 4.9%.

It also contrasts with the average annual growth rate of Canada's nominal GDP of 3.7% projected from 2026 to 2030, which typically serves as a good indicator of a government's revenue growth.

This weak growth in Québec's revenue from federal transfers is explained,<br>in particular, by:

— an insufficient increase in the CHT, whose minimum annual growth will decrease from 5% to 3% starting in 2028-2029, and the CST, whose annual growth has been limited to 3% since 2008-2009;

— a decrease in Québec's demographic weight, as the vast majority of transfers to the provinces and territories, notably the CHT, are distributed on a per capita basis;

— one-time payments and time-limited agreements, for example, for infrastructure.

As a result, Québec's revenue from federal transfers as a percentage of its total revenue, which stood at 21.6% in 2019-2020, is expected to decline to 19.3% in 2026-2027 and 17.7% in 2030-2031.

---

| |
|:---|
| CHART F.6<br>**Federal transfers as a percentage of Québec's total revenue** |
| (per cent) |
| ![](exhibit99-13x010.jpg) |
| Source: Ministère des Finances du Québec. |

---

Québec's Financial<br> Situation F-53

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❏ **Québec's requests to the federal government**

Québec is asking for a larger increase in the CHT. The amounts for health announced by the federal government in February 2023 are clearly insufficient. However, the federal budget, tabled on November 4, 2025, did not contain an increase in the CHT.

The CHT's share of provincial and territorial health spending will stand at 20.8% in 2026-2027, whereas it was at 23.2% in 2016-2017. Moreover, this share will decline as of 2028-2029, because the minimum annual increase in the CHT will fall from 5% to 3% as of 2028-2029.

In this respect, Québec is asking that the minimum annual increase in the CHT of 5% across Canada be applied beyond 2027-2028. Québec would thus receive additional revenue from federal transfers, estimated at $1.1 billion over three years, from 2028-2029 to 2030-2031, to fund its health and social services system.

---

| |
|:---|
| CHART F.7<br>**The Canada Health Transfer as a proportion of provincial and territorial health spending - 2004-2005 to 2039-2040** |
| (per cent) |
| ![](exhibit99-13x011.jpg) |
| Sources: Canadian Institute for Health Information, Signal49 Research, Department of Finance Canada and Ministère des Finances du Québec. |

---

Québec also expects the federal government to contribute financially to the Québec Infrastructure Plan, particularly through the Build Communities Strong Fund and the Canada Public Transit Fund, but also through increased transfers. The investments announced by the federal government in its 2025 budget fall far short of the 10-year, $100 billion plan requested by the provinces and territories.

F-54 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

**An improvement in Québec's economic situation resulting**<br>**in a decrease in its share of the equalization envelope**

Québec's share of the equalization envelope has been decreasing since 2020-2021, particularly due to the improvement in Québec's economic situation in comparison with the rest of Canada.

Québec's share of the equalization envelope, which stood at 66.2% in 2019-2020, is expected to decline to 48.4% in 2030-2031.

---

| |
|:---|
| **Expected change in Québec's share of the equalization envelope**<br>(per cent) |
| ![](exhibit99-13x012.jpg) |

---

Note: A smoothing mechanism with lag is applied to determine equalization payments. For example, the equalization payments for the provinces for 2026-2027 are based on data for 2022-2023 (25%), 2023-2024 (25%) and 2024-2025 (50%).

Sources: Department of Finance Canada and Ministère des Finances du Québec. <br>

Québec's Financial<br> Situation F-55

------

---

| |
|:---|
| &nbsp;&nbsp; **Québec is asking the federal government to reimburse** <br>**the costs incurred in 2024 for welcoming asylum seekers** |
| &nbsp;&nbsp; Québec has welcomed a significant number of asylum seekers since 2017. In 2024 and 2025, Québec welcomed, respectively, 57 225 and 38 515 asylum seekers, one third of Canada's total, while Québec's demographic weight in Canada is close to 22%. Furthermore, as at October 1, 2025, 37.7% of asylum seekers, protected persons, and related groups in Canada were in Québec (190 163 people out of 504 767).<br> While the federal government is primarily responsible for managing the movement of asylum seekers, Québec remains determined to making a humanitarian contribution to ensure that they are always welcomed in a safe and dignified manner. In particular, Québec offers these newcomers several services.<br> As it did for the years 2017 to 2023, the Québec government is asking the federal government to reimburse Québec for the costs of providing services to asylum seekers in 2024. The federal government has only reimbursed Québec $43.1 million of the $733.0 million in costs it incurred in 2024, an amount equivalent to only 6%. Québec expects to soon receive the outstanding amount of $689.9 million. It also expects a long-term compensation mechanism to be developed covering expenditure incurred in 2025 and those that will be incurred as of 2026. |

---

F-56 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-13xu001.jpg)

3.2 **Change in expenditure**

Expenditure consists, on the one hand, of portfolio expenditures tied to the delivery of public services, which are influenced by demographics and prices and, on the other hand, debt service, which is mainly driven by the level of debt and interest rates.

In 2025-2026, expenditure totalled $168.2 billion, that is, $158.0 billion in portfolio expenditures and $10.2 billion in debt service.

— It will stand at $170.8 billion in 2026-2027 and $175.2 billion in 2027-2028.

— In 2025-2026, growth in portfolio expenditures stands at 4.5%, due in particular to advance payments for public transit infrastructure projects, funding for housing construction activities and funding for new subsidized childcare spaces.

— In 2026-2027, the moderate growth in portfolio expenditures of 1.6% is explained by the effect of non-recurring expenditures from 2025-2026 in 2026-2027,<sup>11</sup> including advance payments for public transit infrastructure projects. Excluding these expenditures, growth stands at 3.3%.

— In 2027-2028, the growth in portfolio expenditures, which stands at 2.4%, reflects the expected increase in costs tied to the delivery of government services and the increase in infrastructure investments.

The debt service represents approximately 6% of the government's overall expenditure.

— The 6.5% change in debt service in 2027-2028 is primarily explained by the increase in the debt level and the renewal of maturing fixed-rate loans at higher interest rates.

From 2025-2026 to 2027-2028, the annual growth in expenditure will average 2.8%.

TABLE F.18

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| | | | | |
|:---|:---|:---|:---|:---|
| **Change in expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditure**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditure**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| Portfolio expenditures | 158 029 | 160 489 | 164 279 |  |
|  *% change* | *4.5* | *1.6* | *2.4* | *2.8* |
| Debt service | 10 155 | 10 268 | 10 931 |  |
|  *% change* | *1.9* | *1.1* | *6.5* | *3.1* |
| **TOTAL** | **168 184** | **170 757** | **175 210** |  |
| ***% change*** | ***4.3*** | ***1.5*** | ***2.6*** | ***2.8*** |
| (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. | (1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028. |

---

<sup>________________________________________________</sup>

<sup>11</sup> Expenditures from 2025-2026, not recurring in 2026-2027, are presented on page F.60.

Québec's Financial<br> Situation F-57

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3.2.1 **Portfolio expenditures**

To achieve its objectives and carry out its activities, the government sets up programs that are administered by government entities, including departments and bodies. The set of entities under the responsibility of a department constitutes a portfolio.

TABLE F.19

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| | | | | |
|:---|:---|:---|:---|:---|
| **Change in expenditures by portfolio**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditures by portfolio**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditures by portfolio**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditures by portfolio**<br>(millions of dollars, unless otherwise indicated) | **Change in expenditures by portfolio**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| Santé et Services sociaux | 65 991 | 68 708 | 70 238 |  |
|  *% change*<sup>*(2)*</sup> | *2.7* | *4.1* | *2.2* | *3.0* |
| Éducation | 23 516 | 24 075 | 24 901 |  |
|  *% change*<sup>*(3)*</sup> | *0.7* | *2.4* | *3.4* | *2.2* |
| Enseignement supérieur | 11 335 | 11 749 | 12 359 |  |
|  *% change*<sup>*(4)*</sup> | *-0.4* | *3.7* | *5.2* | *2.8* |
| Famille | 9 741 | 10 009 | 10 160 |  |
|  *% change*<sup>*(5)*</sup> | *8.1* | *2.8* | *1.5* | *4.1* |
| Transports et Mobilité durable | 9 262 | 7 739 | 8 712 |  |
|  *% change*<sup>*(6)*</sup> | *20.5* | *-16.4* | *12.6* | *4.3* |
| Emploi et Solidarité sociale | 5 803 | 5 952 | 5 865 |  |
|  *% change*<sup>*(7)*</sup> | *1.7* | *2.6* | *-1.5* | *0.9* |
| Affaires municipales et Habitation | 5 758 | 5 608 | 5 189 |  |
|  *% change*<sup>*(8)*</sup> | *15.0* | *-2.6* | *-7.5* | *1.2* |
| Économie, Innovation et Énergie | 4 867 | 4 511 | 4 158 |  |
|  *% change*<sup>*(9)*</sup> | *2.1* | *-7.3* | *-7.8* | *-4.5* |
| Environnement, Lutte contre les changements climatiques, Faune et Parcs | 1 989 | 2 004 | 2 197 |  |
|  *% change*<sup>*(10)*</sup> | *-8.8* | *0.8* | *9.6* | *0.2* |
| Other portfolios | 19 767 | 20 734 | 21 100 |  |
|  *% change*<sup>*(11)*</sup> | *10.0* | *4.9* | *1.8* | *5.5* |
| Reallocation of expenditures during the fiscal year |  | -600 | -600 |  |
| **TOTAL** | **158 029** | **160 489** | **164 279** |  |
| ***% change*** | ***4.5*** | ***1.6*** | ***2.4*** | ***2.8*** |

---

F-58 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

TABLE F.19

**Change in expenditures by departmental portfolio (cont.)**

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028.

(2) The portfolio growth reflects the expected rise in costs, while the arrival of Santé Québec will modernize the governance of the health and social services network by optimizing the management of its activities through efficiency gains.

(3) In 2025-2026, growth is due to the end of one-time investments in 2024-2025 for the Offensive formation en construction and for helping students experiencing difficulties going back into the classroom. In 2026-2027, growth is due, in particular, to costs related to the delivery of services in the education sector. Excluding the effect in 2025-2026 of the provision for implementing activities supporting the integration and francization of immigrants, the growth in expenditures stands at 3.0%.

(4) In 2025-2026, the change is attributable to the effect of subsidies granted in 2024-2025 for infrastructure work already carried out by universities, the phasing out of the Perspective Québec scholarship program as of 2025-2026 and the implementation of optimization measures. In 2026-2027 and in 2027-2028, growth is mainly due to the rise in the number of students attending higher education institutions, mitigated by the gradual phasing out of the Perspective Québec scholarship program.

(5) In 2025-2026, the growth in expenditures is due, in particular, to an advance payment in 2023-2024 for 2024-2025 expenditures for the purpose of funding subsidized educational childcare services, and for funding new subsidized childcare spaces as part of the measures in the action plan for completing the educational childcare services network, the Grand chantier pour les familles - Plan d'action pour compléter le réseau des services de garde éducatifs à l'enfance. In 2027-2028, the change in expenditures is due primarily to the forecast investment in educational childcare services infrastructure as part of the implementation of the measures in the action plan for completing the educational childcare services network, for which major investments have been made in recent years.

(6) In 2025-2026 and in 2026-2027, the changes in expenditures are mainly due to advance payments in 2025-2026 for public transit infrastructure projects and for the assistance program for public transit development. In 2027-2028, growth is mainly due to the increase in infrastructure investments.

(7) In 2025-2026, growth in expenditures is primarily due to the gradual phasing out of Opération main-d'œuvre. In 2026-2027, growth is due, in particular, to a higher volume of activities carried out as part of employment assistance measures. In 2027-2028, the change in expenditures is tied, among other things, to the end of certain initiatives and the implementation of optimization measures.

(8) In 2025-2026, the growth in expenditures is due, in particular, to significant investment in housing to increase the supply of social and affordable housing. In 2026-2027 and 2027-2028, the changes in expenditures are mainly due to expenditures in housing, particularly the planned sequence for housing construction.

(9) In 2026-2027, the change in expenditures is due, in particular, to the decrease in the financial impacts related to the government's currently planned financial interventions. In 2027-2028, the change is primarily due to the end of the two-year measures announced in Budget 2025-2026 to help businesses cope with U.S. tariffs.

(10) In 2025-2026, the changes in expenditures are primarily due to the decrease in expenditures under the 2030 Plan for a Green Economy in 2025-2026 as a result of the temporary decline in anticipated revenue from the carbon market. In 2026-2027, the funding increase for public transit from the Electrification and Climate Change Fund is accounted for in the Transports et Mobilité durable portfolio. If this funding were accounted for in the Environnement, Lutte contre les changements climatiques, Faune et Parcs portfolio, the portfolio growth in 2026-2027 would be 7.3%. In 2027-2028, the growth is due, in particular, to the increase in expenditures under the 2030 Plan for a Green Economy resulting from the expected increase in revenue from the carbon market.

(11) In 2025-2026, growth in expenditures is due, in particular, to an increase in transfers to eligible public transit bodies from the Société de financement des infrastructures locales du Québec and the impact of the Contingency Fund. In 2026-2027, the growth in expenditures is due in particular to the provision for implementing activities supporting the integration and francization of immigrants, which fall under the Immigration, Francisation et Intégration portfolio, targeted assistance for the forestry sector and the costs associated with the general election next October. In 2027-2028, growth in expenditures is mainly due to the increase in work related to infrastructure programs funded by the Société de financement des infrastructures locales du Québec, offset by a decrease in targeted assistance to the forestry sector. <br>

Québec's Financial<br> Situation F-59

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**Impact of non-recurring elements on growth in portfolio expenditures**

Portfolio expenditures generally fluctuate based on the changing needs of the Québec population and on the implementation of government initiatives and strategies. However, the stable and predictable change in portfolio expenditures can be impacted by one-time funding that has significant effects on growth.

In 2025-2026, the government recorded non-recurring elements totalling $2 739 million mainly due to advance payments for public transit infrastructure projects. Excluding these elements, growth in expenditures stands at 3.3% in 2026-2027 instead of 1.6%.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Impact of non-recurring elements on growth in portfolio expenditures**<br>(millions of dollars, unless otherwise indicated) | **Impact of non-recurring elements on growth in portfolio expenditures**<br>(millions of dollars, unless otherwise indicated) | **Impact of non-recurring elements on growth in portfolio expenditures**<br>(millions of dollars, unless otherwise indicated) | **Impact of non-recurring elements on growth in portfolio expenditures**<br>(millions of dollars, unless otherwise indicated) | **Impact of non-recurring elements on growth in portfolio expenditures**<br>(millions of dollars, unless otherwise indicated) | **Impact of non-recurring elements on growth in portfolio expenditures**<br>(millions of dollars, unless otherwise indicated) | **Impact of non-recurring elements on growth in portfolio expenditures**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-<br>2026** | **Non-recurring <br>elements** | **Provision <br>transfer<sup>(1)</sup>** | **2025-2026<br>comparable <br>to 2026-2027** | **2026-<br>2027** | **%**<br>**change** |
| Santé et Services sociaux | 65 991 |  | -12 | 65 979 | 68 708 | *4.1* |
| Éducation | 23 516 |  | -146 | 23 370 | 24 075 | *3.0* |
| Enseignement supérieur | 11 335 | -90<sup>(2)</sup> | -27 | 11 218 | 11 749 | *4.7* |
| Famille | 9 741 |  |  | 9 741 | 10 009 | *2.8* |
| Transports et Mobilité durable | 9 262 | -1 980<sup>(3)</sup> |  | 7 282 | 7 739 | *6.3* |
| Emploi et Solidarité sociale | 5 803 |  | -62 | 5 741 | 5 952 | *3.7* |
| Affaires municipals et Habitation | 5 758 | -113<sup>(4)</sup> |  | 5 645 | 5 608 | *-0.7* |
| Économie, Innovation et Énergie | 4 867 | -492<sup>(5)</sup> |  | 4 375 | 4 511 | *3.1* |
| Environnement, Lutte contre les changements climatiques, Faune et Parcs | 1 989 |  |  | 1 989 | 2 004 | *0.8* |
| Other portfolios | 19 767 | -65<sup>(6)</sup> | 247 | 19 950 | 20 734 | *3.9* |
| Reallocation of expenditures during<br>the fiscal year |  |  |  |  | -600 |  |
| **TOTAL** | **158 029** | **-2 739** | **-** | **155 290** | **160 489** | ***3.3*** |

---

(1) Expenditures funded by a provision forecast in another portfolio, namely the provision for implementing activities supporting the integration and francization of immigrants, and the provision for initiatives concerning government revenues and fraud against the government.

(2) Gradual phasing out of the Perspective Québec scholarship program.

(3) Measures to support the transition of public transit authorities ($250 million) and advance payments for public transit infrastructure projects ($1 730 million).

(4) Deferral to the 2027-2028 fiscal year of the transfer granted to the Ville de Montréal for its 2027 municipal year under the framework agreement to recognize the metropolis' special status.

(5) Permanent change in value for the investment in Airbus Canada Limited Partnership ($402 million) and advance payments for research infrastructure to Luqia Technologies ($90 million).

(6) Cost of the Gallant Commission ($10 million) as well as additional expenses of SOPFEU for fighting forest fires in summer 2025 ($2 million) and the disaster assistance program ($27 million). <br>

F-60 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

❏ **Santé et Services sociaux: optimizing activities for better delivery of care and services** 

The expenditures of the Santé et Services sociaux portfolio primarily cover the activities of Santé Québec, which coordinates the operations of the Québec health and social services network, as well as programs administered by the Régie de l'assurance maladie du Québec. They also cover those of other government bodies, such as Héma-Québec, Urgences-Santé and the Institut national de santé publique du Québec.

These expenditures are influenced by demographics, the delivery of care and services, remuneration and technological developments.

The expenditure growths of 2.7% in 2025-2026, 4.1% in 2026-2027 and 2.2% in 2027-2028 reflect the expected rise in costs, while the arrival of Santé Québec will modernize the governance of the health and social services network by optimizing management of its activities through efficiency gains, ensuring that every dollar invested generates better delivery of care and services.

❏ **Éducation: more moderate growth in clientele**

The expenditures of the Éducation portfolio are primarily devoted to the activities of preschool, primary and secondary education institutions. This portfolio also includes programs to promote sports and recreation and to manage national parks.

In general, this portfolio's expenditures vary according to the change in clientele and the remuneration of personnel of the school service centres and school boards.

Following exceptional growth in expenditures of 16.4% in 2024-2025, the education sector will see more moderate growth of 0.7% in 2025-2026. This low growth is primarily due to the end of one-time investments in 2024-2025 to support the Offensive formation en construction and to help students experiencing difficulties going back into the classroom.

In 2026-2027, the 2.4% growth in expenditures is due, in particular, to costs related to the delivery of services in the education sector. Excluding the effect in 2025-2026 of the provision for implementing activities supporting the integration and francization of immigrants, the growth in expenditures stands at 3.0%.

The growth in expenditures of 3.4% in 2027-2028 reflects the expected increase in costs tied to the delivery of services in the education sector.

Québec's Financial<br> Situation F-61

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❏ **Enseignement supérieur: an increase in student numbers**

The expenditures of the Enseignement supérieur portfolio are mainly devoted to the activities of college and university educational institutions. This portfolio also includes student financial assistance. In general, this portfolio's expenditures vary according to changes in clientele and in the remuneration of college and university network personnel, as well as changes in infrastructure investments for chartered universities.

In 2025-2026, the -0.4% change is attributable to the effect of subsidies granted in 2024-2025 for infrastructure work already carried out by universities, the phasing out of the Perspective Québec scholarship program as of 2025-2026, and the implementation of optimization measures.

The expenditure growths of 3.7% in 2026-2027 and 5.2% in 2027-2028 are mainly due to the rise in the number of students attending higher education institutions, mitigated by the gradual phasing out of the Perspective Québec scholarship program.

— Excluding the impact of the provision for activities supporting immigrant integration and francization and the phasing out of the Perspective Québec scholarship program, growth in expenditures stands at 4.7% in 2026-2027.

❏ **Famille: implementation of the Grand chantier pour les familles**

The expenditures of the Famille portfolio primarily include funding for educational childcare services and financial assistance for families.

In 2025-2026, the 8.1% growth in expenditures is due, in particular, to an advance payment in 2023-2024 for 2024-2025 expenditures for the purpose of funding subsidized educational childcare services, and for funding new subsidized childcare spaces as part of the measures in the action plan for completing the educational childcare services network, the Grand chantier pour les familles - Plan d'action pour compléter le réseau des services de garde éducatifs à l'enfance.

In 2026-2027, the 2.8% growth in expenditures reflects, in particular, the increase in costs tied to the delivery of educational childcare services.

The 1.5% growth in expenditures in 2027-2028 is mainly due to the forecast investment in educational childcare services infrastructure as part of the implementation of the measures in the Grand chantier pour les familles, for which significant investments have been made in recent years.

F-62 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

❏ **Transports et Mobilité durable: advance payments for public transit**

The expenditures of the Transports et Mobilité durable portfolio primarily include the construction, maintenance and operation of road infrastructure as well as the funding of public transit services. They also include the management of the government's rolling stock, air fleet and ferry services.

The changes in expenditures of 20.5% in 2025-2026 and -16.4% in 2026-2027 are mainly due to advance payments in 2025-2026 for public transit infrastructure projects, namely the extension of the Montréal metro blue line and Québec City's strategic public transit system, and for the assistance program for public transit development.

In 2027-2028, the 12.6% growth in expenditures is mainly due to the increase in infrastructure investments.

❏ **Emploi et Solidarité sociale: the end of certain initiatives** 

The expenditures of the Emploi et Solidarité sociale portfolio mainly include financial assistance programs for individuals, including last resort financial assistance and employment assistance programs. They also include the activities of Services Québec, the Registrar of Civil Status and the Registraire des entreprises.

In 2025-2026, the moderate growth in expenditures of 1.7% is primarily due to the gradual phasing out of Opération main-d'œuvre.

Growth in expenditures of 2.6% in 2026-2027 is mainly due to a higher volume of activities carried out as part of employment assistance measures.

In 2027-2028, the change in expenditures of -1.5% is tied, among other things, to the end of certain initiatives and the implementation of optimization measures.

Québec's Financial<br> Situation F-63

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❏ **Affaires municipales et Habitation: significant investment in housing in 2025-2026** 

The expenditures of the Affaires municipales et Habitation portfolio primarily consist of financial support for municipalities, particularly for infrastructure, social housing and compensations in lieu of taxes, as well as development measures in the regions, the Capitale-Nationale and the metropolitan area.

In 2025-2026, the 15.0% growth in expenditures is due, in particular, to significant investment in housing through the Québec affordable housing program and partnerships with tax-advantaged funds to increase the supply of social and affordable housing.

In 2026-2027 and 2027-2028, the changes in expenditures of -2.6% and -7.5%, respectively, are mainly due to expenditures on housing, particularly the planned sequence for building units under the AccèsLogis Program, those planned under the Québec affordable housing program, those completed in partnership with tax-advantaged funds, and for 2027-2028, those planned under the low-rental housing renovation program, as well as expenditures stemming from the non-profit housing program.

❏ **Économie, Innovation et Énergie: a gradual reduction in financial interventions**

The expenditures of the Économie, Innovation et Énergie portfolio are mainly devoted to the funding of economic development projects and support for research, innovation and development of energy resources. They also cover youth programs.

In 2025-2026, the 2.1% growth in expenditures provides, in particular, support to Québec businesses by funding economic development projects.

In 2026-2027, the change in expenditures of -7.3% is mainly due to the decrease in the financial impacts related to the government's currently planned financial interventions.

In 2027-2028, the change of -7.8% is primarily due to the end of the two-year measures announced in Budget 2025-2026 to help businesses cope with U.S. tariffs.

F-64 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

❏ **Environnement, Lutte contre les changements climatiques, Faune et Parcs: fluctuation in revenue from the carbon market**

The expenditures of the Environnement, Lutte contre les changements climatiques, Faune et Parcs portfolio are primarily devoted to funding measures to combat climate change, protect the environment and preserve biodiversity. These expenditures also include the operation of public dams, land management of the state's water domain and conservation of wildlife resources and habitats.

The change in expenditures of -8.8% in 2025-2026 is primarily due to the decrease in expenditures under the 2030 Plan for a Green Economy in 2025-2026 as a result of the temporary decline in anticipated revenue from the carbon market.

The weak growth in expenditures of 0.8% in 2026-2027 is due to the recognition in the Transports et Mobilité durable portfolio of the increase in funding for the Electrification and Climate Change Fund for public transit. If this funding were recognized in the Environnement, Lutte contre les changements climatiques, Faune et Parcs portfolio, the portfolio growth would be 7.3%.

In 2027-2028, the 9.6% growth is primarily due to the increase in expenditures under the 2030 Plan for a Green Economy, resulting from the expected increase in revenue from the carbon market.

Québec's Financial<br> Situation F-65

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❏ **Other portfolios: one-time supports**

The expenditures of other portfolios include the expenditures of all other portfolios, which include, in particular, programs in the culture, immigration, tourism and natural resources sectors, as well as the activities of the judicial system, public security, international relations, the legislative branch and central agencies.

In 2025-2026, the 10.0% growth in expenditures is due, in particular, to an increase in transfers to eligible public transit bodies from the Société de financement des infrastructures locales du Québec and the impact of the Contingency Fund.

— In particular, the Contingency Fund is intended to cover unforeseen expenditures that may arise in government programs. Since fiscal year 2024-2025 is over, expenditures funded by a withdrawal from the Contingency Fund are in the portfolios and there is no Contingency Fund reserve for unforeseen expenditures in 2024-2025, inducing growth for 2025-2026.

In 2026-2027, the 4.9% growth in expenditures is due, in particular, to the provision for implementing activities supporting the integration and francization of immigrants, which fall under the Immigration, Francisation et Intégration portfolio, for targeted assistance for the forestry sector and for the costs associated with the general election next October.

In 2027-2028, the 1.8% growth in expenditures is mainly due to the increase in work related to infrastructure programs funded by the Société de financement des infrastructures locales du Québec, offset by a decrease in targeted assistance to the forestry sector.

❏ **Reallocation of expenditures during the fiscal year** 

Responsible management of expenditures gives the government the leeway it needs to invest in priority sectors. By rigorously monitoring the budgetary envelopes allocated to departments and bodies, the government promotes compliance with the objectives set and allows budgetary resources of approximately 1% of program expenditures to be made available and reallocated during the fiscal year.

Based on the reinvestments seen in recent years, Budget 2026-2027 provides a reallocation of $600 million in government expenditures for each year. These reallocations correspond in part to the leeway projected for these fiscal years and help maintain the level of services to the public.

F-66 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

**Growth in expenditure to meet the needs of Quebecers**

From 2019-2020 to 2024-2025, Québec government expenditures grew by an average of 7.5% per year.

This growth in expenditures is due to the desire to enhance services to the public, while coping with the effects of structural factors such as an aging population and significant infrastructure needs. The priorities remained health, education and the economy, in addition to maintaining sound management of public finances.

Furthermore, this growth is influenced by the 11.1% increase in 2020-2021 associated with the COVID-19 pandemic, which required the introduction of exceptional measures to manage the public health crisis and stimulate the economy. Numerous measures were subsequently put in place to protect Quebecers' purchasing power to cope with a significant increase in inflation.

In 2025-2026, the government tabled a plan to restore fiscal balance over five years. During this period, average annual expenditure growth stood at 2.1%. This more moderate growth in recent years allows the government to continue its efforts to support Quebecers and businesses affected by the current disruptions in the global geopolitical and economic landscape. This growth also takes into account actions taken to improve government efficiency, which are contributing to a gradual return to a balanced budget, to be achieved by 2029-2030.

---

| |
|:---|
| **Portfolio expenditure growth** |
| (per cent) |
| ![](exhibit99-13x013.jpg) |

---

(1) Average annual growth rate, corresponding to the geometric mean over six years, from 2019-2020 to 2024-2025.

(2) Average annual growth rate, corresponding to the geometric mean over five years, from 2025-2026 to 2029-2030. <br>

Québec's Financial<br> Situation F-67

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3.2.2 **Debt service**

Debt service consists of interest on the direct debt as well as interest on the liability for the retirement plans and other future benefits of public and parapublic sector employees.

Debt service changes primarily according to the level of debt, interest rates and the return on the Retirement Plans Sinking Fund (RPSF). It will stand at $10.2 billion in 2025-2026, $10.3 billion in 2026-2027 and $10.9 billion in 2027-2028, representing changes of 1.9%, 1.1% and 6.5%, respectively.

In 2025-2026, 2026-2027 and 2027-2028, interest on the direct debt will change by 7.7%, 4.4% and 6.8%, respectively, due, in particular, to the increase in the debt level and the anticipated change in interest rates.

— The higher growth in 2027-2028 is due, in particular, to the renewal of maturing fixed-rate loans at higher interest rates. Global interest rates are expected to be higher in 2027-2028 than they were 10 years ago.

Interest on the liability for the retirement plans and other employee future benefits is reducing debt service since 2025-2026 due to the increase in the investment income of the RPSF, which is deducted from debt service and which now exceeds interest on obligations relating to the retirement plans.

TABLE F.20

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| | | | | |
|:---|:---|:---|:---|:---|
| **Change in debt service**<br>(millions of dollars, unless otherwise indicated) | **Change in debt service**<br>(millions of dollars, unless otherwise indicated) | **Change in debt service**<br>(millions of dollars, unless otherwise indicated) | **Change in debt service**<br>(millions of dollars, unless otherwise indicated) | **Change in debt service**<br>(millions of dollars, unless otherwise indicated) |
|  | **2025-2026** | **2026-2027** | **2027-2028** | **AAGR<sup>(1)</sup>** |
| Interest on direct debt<sup>(2)</sup> | 10 591 | 11 053 | 11 808 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;*% change* | *7.7* | *4.4* | *6.8* |  |
| Interest on the liability for retirement plans and other employee future benefits<sup>(3)</sup> | -436 | -785 | -877 |  |
| **TOTAL** | **10 155** | **10 268** | **10 931** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***% change*** | ***1.9*** | ***1.1*** | ***6.5*** | ***3.1*** |

---

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2025-2026 to 2027-2028.

(2) Interest on the direct debt includes the income of the Sinking Fund for Government Borrowing. This revenue, which is deducted from debt service, consists of interest generated on investments as well as gains and losses on disposal. The forecast for this revenue may be adjusted upward or downward since it is closely tied to changes in interest rates and market behaviour.

(3) This interest corresponds to the interest on obligations relating to the retirement plans and other future benefits of public and parapublic sector employees, minus mainly the investment income of the RPSF. <br>

F-68 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

**4. HIGHER PUBLIC INFRASTRUCTURE INVESTMENTS**

Public infrastructure investments help support the delivery of quality public services. They also help stimulate the economy and increase Québec's long-term economic potential.

In the uncertain context stemming mainly from U.S. trade policy, an increase in infrastructure investments of $11 billion over three years, from 2025-2026 to 2027-2028, was announced in the March 2025 budget.

With the dual objective of supporting the economy and providing Québec with modern infrastructure in good condition, in Budget 2026-2027, the government is planning:

— an increase in infrastructure investments of more than $5 billion over six years, from 2025-2026 to 2030-2031;

— From 2025-2026 to 2030-2031, investments will total $108.0 billion, which is $5.2 billion more than those in the March 2025 budget.

— The higher investments of $5.2 billion correspond to an acceleration of $3.4 billion from 2026-2027 to 2030-2031 and advance payments of $1.8 billion in 2025-2026.

— a $3.0-billion increase in the 2026-2036 Québec Infrastructure Plan (QIP), from 2026-2027 to 2035-2036, to $167 billion.<sup>12</sup>

TABLE F.21

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) | **A $5.2-billion increase in public infrastructure investments over six years**<br>(billions of dollars) |
|  | **2025-<br>2026** | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** | **Total over**<br>**5 years<sup>(1)</sup>** | **Total over**<br>**6 years** |
| Investments from the March 2025 budget<sup>(2)</sup> | 19.2 | 19.4 | 19.8 | 15.0 | 14.5 | 14.9 | 83.6 | 102.8 |
| Investments from the March 2026 budget | 21.0 | 19.4 | 19.8 | 17.0 | 15.4 | 15.4 | 87.0 | 108.0 |
| **Change** | **1.8** | **-** | **-** | **2.0** | **0.9** | **0.5** | **3.4** | **5.2** |

---

(1) The total over five years covers the years 2026-2027 to 2030-2031.

(2) For 2025-2026, these are probable investments, excluding advance payments of $1.8 billion, including $1.7 billion in public transit.

<sup>________________________________________________</sup>

<sup>12</sup> The 2025-2035 QIP stood at $164 billion.

Québec's Financial<br> Situation F-69

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Over the past eight years, the QIP has been increased each year, going from $100.4 billion in March 2018 to $167.0 billion in March 2026. This increase of more than 66% was necessary, given the importance of providing Québec with modern infrastructure and investing more in maintaining the building inventory.

— In addition, Hydro-Québec will make a significant contribution to Québec's economic growth with the progressive completion of its Action Plan 2035 - Towards a Decarbonized and Prosperous Québec. This plan will require capital investments of between $135 billion and $160 billion over the 2024-2035 period.

---

| |
|:---|
| CHART F.8<br>**Change in the Québec Infrastructure Plan** |
| (billions of dollars) |
| ![](exhibit99-13x014.jpg) |
| Source: Secrétariat du Conseil du trésor. |

---

Québec expects the federal government to contribute financially to the QIP, an important plan, particularly through the Build Communities Strong Fund and the Canada Public Transit Fund.

In its 2025 budget, the federal government announced investments of $23.2 billion over 10 years through the Build Communities Strong Fund. Although these investments fall far short of Québec's expectations, with the provinces and territories asking for a $100-billion plan over 10 years, the government will use the federal funds as leverage to ensure that priority projects are carried out across Québec.

F-70 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

❏ **Improved service delivery**

These investments of $167.0 billion over 10 years,<sup>13</sup> spread across all regions of Québec, will enable the government to continue its efforts to maintain and enhance the infrastructure required to provide services to the population. In particular, they will enable:

— building, renovating, and expanding hospitals, building seniors' homes as well as replacing medical equipment;

— completing school renovation work and adding classrooms;

— maintaining the university and college network infrastructure;

— maintaining the road network and further developing it;

— developing core public transit networks and refurbishing existing networks;

— continuing with the digital transformation of public bodies;

— building and renovating social and affordable housing.

<sup>________________________________________________</sup>

<sup>13</sup> The 2026-2036 Québec Infrastructure Plan published by the Secrétariat du Conseil du trésor provides detailed information on planned investments by sector.

Québec's Financial<br> Situation F-71

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❏ **Annual investments are at historically high levels**

Annual infrastructure investments are reaching historically high levels. They rose from $9.1 billion in 2018-2019 to $21.0 billion in 2025-2026.<sup>14</sup> They will stand at $19.4 billion in 2026-2027 and $19.8 billion in 2027-2028.

These high investments increase pressure on the financial framework regarding debt service, among other things. To respect taxpayers' ability to pay and following annual infrastructure investments at historic levels, the government intends to stabilize these investments starting in 2028-2029. At $17 billion in 2028-2029, annual investments will amount to 9.6% of revenue, compared to 11.7% in 2026-2027 and 11.5% in 2027-2028.<sup>15</sup>

The government's goal is to ensure the long-term sustainability of public finances and preserve Québec's credit rating for its borrowings.

---

| |
|:---|
| CHART F.9<br>**Annual investments provided for in the 2026-2036 Québec Infrastructure Plan** |
| (billions of dollars) |
| ![](exhibit99-13xu005.jpg) |

---

Note: The investments include advance payments for infrastructure of $1.4 billion in 2021-2022, $0.8 billion in 2022-2023 and $1.8 billion in 2025-2026, including $1.7 billion in public transit.

Source: Secrétariat du Conseil du trésor.

<sup>________________________________________________</sup>

<sup>14</sup> Investments in 2025-2026 include advance payments for infrastructure of $1.8 billion, including $1.7 billion in public transit.

<sup>15</sup> For information purposes, over the past 12 years, from 2013-2014 to 2024-2025, average annual infrastructure investments as a proportion of revenue were 9.7%.

F-72 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

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| |
|:---|
| &nbsp;&nbsp; **Significant support for municipalities** |
| &nbsp;&nbsp; Since 2018, the Québec government's support for municipalities, consisting of transfers to fund infrastructure, tax transfers to support municipalities' fiscal capacity and subsidies to fund various municipal needs, has increased from $4.2 billion to more than $6.6 billion per year.<br> **Strategic investments in drinking water, wastewater and essential infrastructure**<br> The Québec government allocates $2.2 billion per year to municipal infrastructure funding.<br> These investments, which are primarily managed and overseen by the Ministère des Affaires municipales et de l'Habitation and the Ministère des Transports et de la Mobilité durable, support municipalities in the following areas:<br> — maintaining and building drinking water treatment and wastewater sanitation infrastructure, as well as municipal or community infrastructure;<br> — supporting public transit and local road maintenance;<br> — strengthening the resilience of infrastructure in the face of disasters and adverse climate events.<br> To meet the needs raised by municipalities, the investment envelope of the Ministère des Affaires municipales et de l'Habitation will be increased by nearly $150 million in 2026-2027.<br> Funds from the Canada Housing Infrastructure Fund will be added to these amounts.<br> ***A nearly $1 billion Canada-Québec agreement benefiting Québec municipalities***<br> On January 21, 2026, the federal government and the Québec government announced an agreement regarding the provincial and territorial agreements component of the Canada Housing Infrastructure Fund.<br> Under this agreement, Québec will receive $955 million over nine years, from 2025-2026 to 2033-2034, to increase water infrastructure capacity and efficiency, thereby supporting housing construction in all Québec municipalities.<br> **Tax transfers<sup>1</sup>** **to support municipalities' financial capacity**<br> In addition to transfers for infrastructure, tax transfers to municipalities total $1.7 billion per year. This amount has grown significantly in recent years, mainly due to the sharing of a one-point increase in the QST.<br> This mechanism, which constitutes a major recurring transfer introduced in 2021 and made permanent by the *Act respecting the Ministère des Affaires municipales, des Régions et de l'Occupation du territoire*<sup>2</sup> in 2024, is expected to exceed $1 billion per year by 2030, providing municipalities with a stable and predictable source of revenue. |

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1 These transfers, which are non-investment transfers, include, in particular, the sharing of one percentage point of QST growth, compensation in lieu of taxes for public buildings and land, amounts provided for in the Regions and Rurality Fund, the equalization grant and natural resource royalties.

2 CQLR, chapter M-22.1. <br>

Québec's Financial<br> Situation F-73

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❏ **A significant share of the QIP allocated to public infrastructure maintenance**

Continued significant investments are necessary to maintain public infrastructure. Some public infrastructure is aging and requires repairs.

A 71% share of 2026-2036 QIP investments will be used for infrastructure maintenance.<sup>16</sup> Compared to the 2025-2035 QIP, this is a significant increase, as the previous figure stood at 65%.<sup>17</sup> New infrastructure will account for 29% of investments.

---

| |
|:---|
| CHART F.10<br>**2026-2036 Québec Infrastructure Plan by type of investment** |
| ![](exhibit99-13x016.jpg) |
| Source: Secrétariat du Conseil du trésor. |

---

<sup>________________________________________________</sup>

<sup>16</sup> This share excludes the central envelope.

<sup>17</sup> The 71% share in the 2026-2036 QIP for infrastructure maintenance represents $105.8 billion, compared to $96.7 billion in the 2025-2035 QIP.

F-74 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

**APPENDIX 1: PORTFOLIO EXPENDITURES**

TABLE F.22

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| | | |
|:---|:---|:---|
| **Portfolio expenditure forecasts**<br>(millions of dollars) | **Portfolio expenditure forecasts**<br>(millions of dollars) | **Portfolio expenditure forecasts**<br>(millions of dollars) |
|  | **2025-2026** | **2026-2027** |
| National Assembly | 192 | 200 |
| Persons appointed by the National Assembly | 169 | 297 |
| Affaires municipales et Habitation | 5 758 | 5 608 |
| Agriculture, Pêcheries et Alimentation | 1 522 | 1 531 |
| Conseil du trésor, Administration gouvernementale et Efficacité de l'État | 2 883 | 3 361 |
| Conseil exécutif | 627 | 630 |
| Culture et Communications | 1 990 | 2 054 |
| Cybersécurité et Numérique | 357 | 353 |
| Économie, Innovation et Énergie | 4 867 | 4 511 |
| Éducation | 23 516 | 24 075 |
| Emploi et Solidarité sociale | 5 803 | 5 952 |
| Enseignement supérieur | 11 335 | 11 749 |
| Environnement, Lutte contre les changements climatiques, Faune et Parcs | 1 989 | 2 004 |
| Famille | 9 741 | 10 009 |
| Finances | 4 073 | 4 087 |
| Immigration, Francisation et Intégration | 516 | 756 |
| Justice | 2 018 | 2 039 |
| Langue française | 77 | 81 |
| Relations internationales et Francophonie | 154 | 148 |
| Ressources naturelles et Forêts | 1 403 | 1 521 |
| Santé et Services sociaux | 65 991 | 68 708 |
| Sécurité publique | 3 015 | 2 876 |
| Tourisme | 528 | 552 |
| Transports et Mobilité durable | 9 262 | 7 739 |
| Travail | 243 | 248 |
| Reallocation of expenditures during the fiscal year |  | -600 |
| **TOTAL** | **158 029** | **160 489** |
| Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. | Note: Totals may not add due to rounding. |

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Québec's Financial<br> Situation F-75

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![](exhibit99-13xu001.jpg)

**APPENDIX 2: REPORT ON THE APPLICATION OF THE *BALANCED BUDGET ACT***

❏ ***Balanced Budget Act***

Pursuant to the *Balanced Budget Act*, the Minister of Finance must report to the National Assembly, in the budget speech, on the achievement of the objectives of the Act and any variance recorded.

The purpose of the Act is to balance the government's budget. To that end, the Act sets limits on the circumstances that can lead to a budget deficit being anticipated and provides for, in certain cases and in full transparency, a process for returning to a balanced budget.

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| |
|:---|
| &nbsp;&nbsp; ***Balanced Budget Act*** |
| &nbsp;&nbsp; The *Balanced Budget Act* was passed by the National Assembly in 1996 and modernized in December 2023. The Act specifies how the budgetary balance is calculated and sets out the applicable rules in the case of an actual or anticipated budgetary deficit.<br> Pursuant to the Act, the government may not anticipate a budgetary deficit, except in one of the following three specific circumstances:<br> — a disaster having a major impact on revenue or expenditure;<br> — a significant deterioration of economic conditions;<br> — a change in federal programs of transfer payments to the provinces that would substantially reduce transfer payments to the government.<br> The Act also provides for the presentation of a plan to restore fiscal balance when the budgetary deficit for a given fiscal year is greater than the revenues recorded in the Generations Fund for that year, and it specifies the cases in which such a plan may be replaced.<br> The plan must present decreasing deficits over a maximum period of five years and anticipate, for the fiscal year preceding the return to a balanced budget, a deficit of 25% or less of the budget deficit referred to in the previous paragraph. |

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Québec's Financial<br> Situation F-77

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❏ **Budgetary balance within the meaning of the** ***Balanced Budget Act***

The objectives of the *Balanced Budget Act* are achieved if the budgetary balance, calculated in accordance with the Act, is zero or positive. Otherwise, the Minister must report on the circumstances causing the anticipated budgetary deficit. Table F.23 shows the components for establishing the budgetary balance within the meaning of the Act.

Balanced budgets within the meaning of the Act were achieved for fiscal years 2017-2018 to 2019-2020. For 2020-2021, 2021-2022 and 2022-2023, the COVID-19 pandemic had a major impact on the government's financial framework. The *Balanced Budget Act* was amended to suspend the obligation to achieve a balanced budget in those years. However, a balanced budget was achieved in 2020-2021 and 2021-2022 through the use of the stabilization reserve. A plan to offset budget overruns was presented during Budget Speech 2023-2024 in accordance with the *Balanced Budget Act* in effect at that time.

In December 2023, the Act was modernized to make it simpler and more flexible, while keeping it equally binding in terms of the obligation to provide for a balanced budget. The *Public Accounts 2022-2023*, published after the Act was modernized and came into force, showed a deficit, within the meaning of the Act, of $6 084 million. Since this deficit exceeds the revenues allocated to the Generations Fund, a plan to restore fiscal balance was presented in the Budget Speech 2025-2026. The year 2026-2027 is therefore the second year of the plan to restore fiscal balance.

The financial framework of Budget 2026-2027 complies with the Act, as the projected deficits are lower than or equal to those in the plan tabled in 2025-2026.

---

| |
|:---|
| CHART F.11<br>**Budgetary balance from 2017-2018 to 2029-2030** |
| (millions of dollars) |
| ![](exhibit99-13x017.jpg) |

---

Note: Budgetary balance within the meaning of the *Balanced Budget Act*.

(1) Use of the stabilization reserve resulted in balanced budgets for 2020-2021 and 2021-2022, and a budget deficit balance of $5 635 million for 2022-2023. The stabilization reserve was abolished in 2023-2024. <br>

F-78 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-13xu001.jpg)

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| |
|:---|
| &nbsp;&nbsp; **Budgetary balance within the meaning of the Act** |
| The budgetary balance corresponds essentially to the surplus or the deficit presented in the public accounts (surplus or deficit from operations) reduced by the amount of revenues dedicated to the Generations Fund and adjusted to take certain accounting changes into consideration, if applicable. This definition of budgetary balance is more restrictive than in other provinces and reflects the government's determination to reduce the debt and preserve generational equity.<br> Before 2023-2024, the Act allowed the stabilization reserve to be taken into account in assessing whether a balanced budget had been achieved. Where the calculated budgetary balance was a deficit, the government used an equivalent amount from the reserve to present a nil budgetary balance and achieve a balanced budget without having to implement an offsetting financial plan. The budgetary balance thus obtained corresponded to the budgetary balance within the meaning of the Act after taking into account the stabilization reserve; however, the stabilization reserve was abolished as of 2023-2024. |

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❏ **The plan to restore fiscal balance**

The policy directions governing the plan to restore fiscal balance, the monitoring of that plan and the trajectory for returning to a balanced budget are presented in subsection 2 of this section.

Québec's Financial<br> Situation F-79

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TABLE F.23

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) | **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) | **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) | **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) | **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) | **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) | **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) | **Budgetary balance within the meaning of the** ***Balanced Budget Act***<br>(millions of dollars) |
| **Fiscal year** | **Accounting<br>surplus**<br>**(deficit)<sup>(1)</sup>** | **Revenues dedicated to**<br>**the Generations Fund** | **Accounting**<br>**and other<br>changes<sup>(2)</sup>** | **Budgetary balance**<br>**within the meaning**<br>**of the Act** | **Stabilization reserve<sup>(3)</sup>** | **Stabilization reserve<sup>(3)</sup>** | **Budgetary balance**<br>**within the meaning**<br>**of the Act after reserve<sup>(4)</sup>** |
| **Fiscal year** | **Accounting<br>surplus**<br>**(deficit)<sup>(1)</sup>** | **Revenues dedicated to**<br>**the Generations Fund** | **Accounting**<br>**and other<br>changes<sup>(2)</sup>** | **Budgetary balance**<br>**within the meaning**<br>**of the Act** | **Allocations** | **Uses** | **Budgetary balance**<br>**within the meaning**<br>**of the Act after reserve<sup>(4)</sup>** |
| 2015-2016 | 3 269 | -1 453 | 375 | 2 191 | -2 191 |  |  |
| 2016-2017 | 3 944 | -2 001 | 418 | 2 361 | -2 361 |  |  |
| 2017-2018 | 2 804 | -2 293 | 2 111 | 2 622 | -2 622 |  |  |
| 2018-2019 | 7 675 | -3 477 | 605 | 4 803 | -4 803 |  |  |
| 2019-2020 | 1 845 | -2 606 | 765 | 4 | -4 |  |  |
| 2020-2021 | -4 378 | -3 313 | -3 069 | -10 760 |  | 10 760 |  |
| 2021-2022 | 2 567 | -3 617 | 278 | -772 |  | 772 |  |
| 2022-2023 | -3 126 | -3 082 | 124 | -6 084 |  | 449 | -5 635<sup>(5)</sup> |
| 2023-2024 | -5 994 | -2 047 |  | -8 041<sup>(6)</sup> | n/a | n/a | n/a |
| 2024-2025 | -5 175 | -2 397 |  | -7 572<sup>(6)</sup> | n/a | n/a | n/a |
| 2025-2026 | -7 655 | -2 289 |  | -9 944<sup>(7)</sup> | n/a | n/a | n/a |
| 2026-2027 | -6 265 | -2 347 | - | -8 612<sup>(7)</sup> | n/a | n/a | n/a |

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(1) The annual surpluses (deficits) were restated to take into account, in particular, the accounting standards respecting transfer payments and asset retirement obligations.

(2) To comply with the *Balanced Budget Act*, adjustments are made to take into account restatements in the public accounts, including the change in the application of the accounting standard respecting transfer payments and its impact on the accumulated deficit in 2020-2021.

(3) The stabilization reserve was repealed on December 7, 2023.

(4) The budgetary balance within the meaning of the *Balanced Budget Act* after reserve corresponds to the budgetary balance that takes into account allocations to the stabilization reserve and uses of it in order to maintain a balanced budget or reduce the budgetary deficit.

(5) The obligation to achieve a balanced budget was suspended from March 25, 2021 to March 31, 2023.

(6) Deficits are permitted in 2023-2024 and 2024-2025. Since the deficit for 2022-2023 exceeds the revenue allocated to the Generations Fund, deficits are permitted for the following two years, before the plan to restore fiscal balance was tabled.

(7) A plan to restore fiscal balance was tabled in 2025-2026. During the execution of a plan, a deficit is permitted if it is less than that of the plan.

F-80 Budget 2026-2027 <br>Budget Plan

------

## Exhibit 99.14

------

Exhibit 99.14

Section G

**THE QUÉBEC GOVERNMENT'S DEBT**

---

| | |
|:---|:---|
| [**Summary**](#page_2) | [**G.3**](#page_2) |
| [**1. Québec's debt**](#page_4) | [**G.5**](#page_4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.1 Different concepts of debt](#page_4) | [G.5](#page_4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.2 Net debt](#page_5) | [G.6](#page_5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.3 Gross debt](#page_14) | [G.15](#page_14) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.4 Debt representing accumulated deficits](#page_18) | [G.19](#page_18) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.5 The debt reduction objective and the Generations Fund](#page_21) | [G.22](#page_21) |
| [**2. Financing**](#page_28) | [**G.29**](#page_28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.1 Financing program](#page_28) | [G.29](#page_28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.2 Borrowings contracted in 2025-2026](#page_30) | [G.31](#page_30) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.3 Debt management strategy](#page_32) | [G.33](#page_32) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2.4 Yield on the Québec government's securities](#page_35) | [G.36](#page_35) |
| **[3. Pension plans and funds deposited by the Ministère des Finances with the Caisse de dépôt et placement du Québec](#page_37)** | **[G.39](#page_37)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.1 Net liability for pension plans](#page_37) | [G.39](#page_37) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3.2 Returns on funds deposited with the Caisse de dépôt et placement du Québec](#page_39) | [G.41](#page_39) |
| **[4. Credit ratings](#page_42)** | **[G.45](#page_42)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.1 Québec's credit ratings](#page_42) | [G.45](#page_42) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.2 Comparison of the credit ratings of Canadian provinces](#page_43) | [G.46](#page_43) |
| **[APPENDIX: Report on the application of the *Act to reduce the debt and establish the Generations Fund*](#page_46)** | [**G.49**](#page_46) |

---

G.1

------

![](exhibit99-14xu001.jpg)

**SUMMARY**

Québec has made notable progress in reducing its debt load in recent decades. Since 2019, net debt to GDP has fallen significantly, despite the pandemic, major investments in public infrastructure, and reinvestment in public services. However, both in Canada and internationally, governments have generally seen their indebtedness rise in recent years.<sup>1</sup>

As at March 31, 2026, Québec's net debt will represent 38.8% of GDP, a considerable decrease of 4.1 percentage points from the level of 42.9% as at March 31, 2019. The average net debt to GDP of the provinces was broadly unchanged during this period, falling from 30.8% as at March 31, 2019 to 30.4% of GDP as at March 31, 2026.

Québec is one of the only provinces, along with Ontario and New Brunswick, to have reduced its indebtedness during this period. In 2025-2026, Québec's deficit as a proportion of the economy will also be lower than the provincial average.

Mainly due to major investments in public infrastructure, such as the maintenance, modernization, and construction of hospitals and schools, net debt to GDP will rise to 39.3% as at March 31, 2028. However, the government expects the net debt burden to decrease over the five-year financial framework period. Québec's net debt burden has also been adjusted downward compared to Budget 2025-2026 for each year of the financial framework.

In accordance with the *Act to reduce the debt and establish the Generations Fund*, the net debt burden will be reduced to 35.5% of GDP by 2032-2033 and to 32.5%<br>of GDP by 2037-2038.

&nbsp;&nbsp;&nbsp;**As at March 31, 2026, Québec's net debt will represent 38.8% of GDP, a decrease of 4.1 percentage points from the level of 42.9% as at March 31, 2019, making Québec one of the only provinces to have reduced its indebtedness during this period.**<br>**This reduction in indebtedness was achieved against a backdrop of a pandemic, heightened geopolitical tensions caused, among other things, by Russia's invasion of Ukraine, and a trade dispute with the United States.** 

<sup>_______________________________________</sup>

<sup>1</sup> For advanced economies, the IMF estimated in October 2025 that average gross debt had risen from 102.7% of GDP in 2018 to 110.2% in 2025 and that it would continue to increase. The IMF expected it to reach 118.5% of GDP in 2030. This corresponds to the debt of all levels of public administration.

The Québec<br> Government's Debt G.3

------

---

| |
|:---|
| CHART G.1<br>**Factors responsible for the change in the government's net debt** **from 2019 to 2026** |
| (percentage points of GDP) |
| ![](exhibit99-14x001.jpg) |

---

Note: Totals may not add due to rounding.

(1) For example, revaluation gains related to government enterprises.

In 2026-2027, revenues dedicated to the Generations Fund will stand at $2.3 billion. They will reach $2.9 billion in 2030-2031.

The balance of the Generations Fund, which will stand at $16.6 billion as at March 31, 2026, is expected to reach $29.1 billion as at March 31, 2031, representing 10.4% of net debt.

The Generations Fund, created 20 years ago, is an efficient and transparent tool that the Québec government adopted to achieve its debt reduction targets. It allows Quebecers to easily identify the amounts allocated each year by the government to reduce debt.

The 2025-2026 financing program is completed, and pre-financing totalling $9.3 billion has been carried out. Since the March 2025 budget, demand for Québec bonds has been excellent, as evidenced by the issue of a record-breaking amount of US$4.5 billion in January 2026, the most voluminous issue of its history.

Québec enjoys outstanding credit quality. It should be noted that the rating agency Moody's gives Québec a higher credit rating than Ontario, while S&P Global does the opposite.

G.4 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

**1. QUÉBEC'S DEBT**

1.1 **Different concepts of debt**

Several different concepts of debt are used to measure a government's indebtedness.

— **Gross debt** corresponds to the debt on financial markets, plus the commitments made regarding to the retirement plans of government employees. The balance of the Generations Fund is subtracted from gross debt.

— As at March 31, 2026, Québec's gross debt will stand at $272.6 billion, or 42.3% of GDP. This is below the target for reducing gross debt to 45% of GDP by 2025-2026 that had been set in 2010.

— **Net debt** corresponds to the government's liabilities as a whole, less its financial assets. This is a concept used by the other provinces, as well as the OECD and the IMF.

— As at March 31, 2026, Québec's net debt will stand at $250.3 billion, or 38.8% of GDP. The government aims to reduce net debt to GDP to 32.5% by 2037-2038.

— **Debt representing accumulated deficits** corresponds to the difference between the government's assets and liabilities. It is the debt that does not correspond to any assets. This is the concept that the federal government uses to present the change in its debt.

— As at March 31, 2026, the debt representing Québec's accumulated deficits will stand at $130.4 billion, or 20.2% of GDP.

TABLE G.1

**Québec government debt as at March 31 according to different concepts**<br> (millions of dollars, unless otherwise indicated)****

<br> ---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | **2026** | **2027** |
| **GROSS DEBT<sup>(1)</sup>** | **255 999** | **272 644** | **290 045** |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *41.5* | *42.3* | *43.5* |
| Less: Financial assets, net of other liabilities<sup>(2)</sup> | -19 836 | -22 355 | -30 536 |
| **NET DEBT** | **236 163** | **250 289** | **259 509** |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *38.3* | *38.8* | *38.9* |
| Less: Non-financial assets | -111 751 | -119 856 | -123 077 |
| **DEBT REPRESENTING ACCUMULATED DEFICITS** | **124 412** | **130 433** | **136 432** |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *20.2* | *20.2* | *20.5* |

---

Note: A new accounting standard (Section *PS 1202 - Financial Statement Presentation*) will come into force on April 1, 2026. From that date, the concept of net debt will be replaced by that of net financial liabilities. The adjustment relates to a liability item called deferred revenue. Non-financial liabilities, which correspond to deferred revenue, will no longer be added to net debt, which currently includes all liabilities. However, it will continue to be considered in the calculation of the debt representing accumulated deficits, which will be renamed "net liabilities." This change results in a 0.8% reduction in net debt to GDP in 2026-2027. However, it does not entail any changes with regard to gross debt and debt representing accumulated deficits.

(1) Gross debt excludes pre-financing and takes into account the amounts accumulated in the Generations Fund.

(2) Financial assets include, in particular, participations in government enterprises (e.g. Hydro-Québec) and accounts receivable. Other liabilities (e.g. accounts payable) are subtracted. As of April 1, 2026, non-financial liabilities are no longer deducted from financial assets, net of other liabilities. <br>

The Québec<br> Government's Debt G.5

------

1.2 **Net debt**

Net debt corresponds to the government's liabilities minus its financial assets. This is a concept used by the other provinces, as well as the OECD and the IMF.

As at March 31, 2026, Québec's net debt will stand at $250.3 billion, or 38.8% of GDP. The increase over the previous year (0.5 percentage points higher) is due to the budgetary deficit and investments in public infrastructure, such as the maintenance, modernization, and construction of hospitals and schools.

Net debt to GDP is expected to continue to increase until 2027-2028. A gradual reduction is subsequently expected tied to, in part, the improved budgetary situation and deposits of dedicated revenues in the Generations Fund. The government aims to reduce net debt to GDP to 32.5% by 2037-2038.

— It should be noted that net debt to GDP will stand at 39.3% as at March 31, 2028, whereas a ratio of 41.9% was forecast in Budget 2025-2026 for that same year.

Both in Canada and internationally, governments have generally seen their indebtedness rise in recent years. However, the Québec government expects its net debt burden to decrease over the five-year financial framework period. Québec's net debt burden has also been adjusted downward compared to Budget 2025-2026 for each year of the financial framework.

TABLE G.2<br>**Factors responsible for the change in net debt**<br> (millions of dollars, unless otherwise indicated)****

<br> ---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Debt,<br>beginning<br>of year** | **Accounting<br> deficit<br>(surplus)<sup>(1)</sup>** | **Net capital<br>investments** | **Accounting<br>adjustments<sup>(2)</sup>** | **Total<br>change** | **Debt,**<br>**end of**<br>**year** | ***% of<br>GDP*** |
| 2024-2025 | 220 016 | 5 175 | 9 888 | 1 084 | 16 147 | 236 163 | *38.3* |
| 2025-2026 | 236 163 | 7 655 | 8 105 | -1 634 | 14 126 | 250 289 | *38.8* |
| 2026-2027 | 244 720<sup>(3)</sup> | 6 265 | 8 790 | -266 | 14 789 | 259 509 | *38.9* |
| 2027-2028 | 259 509 | 3 204 | 8 694 | -266 | 11 632 | 271 141 | *39.3* |
| 2028-2029 | 271 141 | -1 116 | 7 047 | -266 | 5 665 | 276 806 | *38.8* |
| 2029-2030 | 276 806 | -2 780 | 5 544 | -266 | 2 498 | 279 304 | *37.9* |
| 2030-2031 | 279 304 | -2 918 | 5 222 | -266 | 2 038 | 281 342 | *36.9* |

---

(1) From 2027-2028 to 2030-2031, the accounting balance includes the gap to be bridged.

(2) Accounting adjustments include the impact of revaluation elements on net debt. As at March 31, 2025, the increase in net debt is mainly due to revaluation losses related to derivative financial instruments. As at March 31, 2026, gains are expected, which will lead to a decrease in net debt. These variations will have no permanent effect on debt.

(3) As of April 1, 2026, the concept of net debt will be replaced by that of net financial liabilities. It is estimated that this change will result in a $5.6-billion reduction in net debt in 2026-2027, or 0.8% of GDP. <br>

G.6 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;**Net financial liabilities will replace net debt**<br>**under a new accounting standard** |
| &nbsp;&nbsp;&nbsp;A new accounting standard (Section *PS 1202 - Financial Statement Presentation*) relating to the presentation of financial statements will come into force on April 1, 2026. The adjustment relates to a liability item called deferred revenue.<br>This standard requires liabilities to be presented in two categories: financial liabilities and non-financial liabilities. Such a categorization makes it possible to specify the net debt indicator, which will be replaced by net financial liabilities. This indicator will correspond to the difference between financial liabilities and financial assets. Financial liabilities are those that will require cash outflows to settle them. Non-financial liabilities, which will be excluded from the calculation, consist of deferred revenue,<sup>1</sup> such as amounts received from the federal government for the construction of infrastructure belonging to the Québec government that must remain in service for a specified period. They are estimated at $5.6 billion (0.8% of GDP) in 2026-2027.<br>Net debt reduction targets will now relate to net financial liabilities. An amendment to the *Act to reduce the debt and establish the Generations Fund* will be proposed in this regard.<br>Furthermore, the coming into force of this new standard will have no impact on the budgetary balance. In addition, the accumulated deficit will be renamed "net liabilities," but its calculation will remain the same. Lastly, gross debt will continue to be calculated in the same way. |

---

1 Deferred revenue comprises amounts received by the government for which it has not performed the agreed-upon actions required for such amounts to be recognized as revenue (for example, under a Canada-Québec agreement). In the statement of financial position, deferred revenue is presented in liabilities.

The Québec<br> Government's Debt G.7

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** |
| Net capital investments consist of the government's gross investments minus depreciation expenses.<br>Even though gross investments have an impact on debt, net capital investments are presented in the factors responsible for the change in the debt due to the fact that depreciation expenses are included in the accounting balance.<br>From 2026-2027 to 2030-2031, net capital investments will contribute to increasing net debt by $7.1 billion per year on average.<br>These investments are included in the 2026-2036 Québec Infrastructure Plan, which has been increased to $167.0 billion in this budget. | Net capital investments consist of the government's gross investments minus depreciation expenses.<br>Even though gross investments have an impact on debt, net capital investments are presented in the factors responsible for the change in the debt due to the fact that depreciation expenses are included in the accounting balance.<br>From 2026-2027 to 2030-2031, net capital investments will contribute to increasing net debt by $7.1 billion per year on average.<br>These investments are included in the 2026-2036 Québec Infrastructure Plan, which has been increased to $167.0 billion in this budget. | Net capital investments consist of the government's gross investments minus depreciation expenses.<br>Even though gross investments have an impact on debt, net capital investments are presented in the factors responsible for the change in the debt due to the fact that depreciation expenses are included in the accounting balance.<br>From 2026-2027 to 2030-2031, net capital investments will contribute to increasing net debt by $7.1 billion per year on average.<br>These investments are included in the 2026-2036 Québec Infrastructure Plan, which has been increased to $167.0 billion in this budget. | Net capital investments consist of the government's gross investments minus depreciation expenses.<br>Even though gross investments have an impact on debt, net capital investments are presented in the factors responsible for the change in the debt due to the fact that depreciation expenses are included in the accounting balance.<br>From 2026-2027 to 2030-2031, net capital investments will contribute to increasing net debt by $7.1 billion per year on average.<br>These investments are included in the 2026-2036 Québec Infrastructure Plan, which has been increased to $167.0 billion in this budget. | Net capital investments consist of the government's gross investments minus depreciation expenses.<br>Even though gross investments have an impact on debt, net capital investments are presented in the factors responsible for the change in the debt due to the fact that depreciation expenses are included in the accounting balance.<br>From 2026-2027 to 2030-2031, net capital investments will contribute to increasing net debt by $7.1 billion per year on average.<br>These investments are included in the 2026-2036 Québec Infrastructure Plan, which has been increased to $167.0 billion in this budget. | Net capital investments consist of the government's gross investments minus depreciation expenses.<br>Even though gross investments have an impact on debt, net capital investments are presented in the factors responsible for the change in the debt due to the fact that depreciation expenses are included in the accounting balance.<br>From 2026-2027 to 2030-2031, net capital investments will contribute to increasing net debt by $7.1 billion per year on average.<br>These investments are included in the 2026-2036 Québec Infrastructure Plan, which has been increased to $167.0 billion in this budget. | Net capital investments consist of the government's gross investments minus depreciation expenses.<br>Even though gross investments have an impact on debt, net capital investments are presented in the factors responsible for the change in the debt due to the fact that depreciation expenses are included in the accounting balance.<br>From 2026-2027 to 2030-2031, net capital investments will contribute to increasing net debt by $7.1 billion per year on average.<br>These investments are included in the 2026-2036 Québec Infrastructure Plan, which has been increased to $167.0 billion in this budget. |
| **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** | **Net capital investments** |
| (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) | (millions of dollars) |
|  | **2025-**<br>**2026** | **2026-**<br>**2027** | **2027-**<br>**2028** | **2028-**<br>**2029** | **2029-**<br>**2030** | **2030-**<br>**2031** |
| Gross investments<sup>(1)</sup> | 13 956 | 14 934 | 15 133 | 13 751 | 12 485 | 12 395 |
| Less: Depreciation<sup>(2)</sup> | -5 851 | -6 144 | -6 439 | -6 704 | -6 941 | -7 173 |
| **TOTAL** | **8 105** | **8 790** | **8 694** | **7 047** | **5 544** | **5 222** |
| (1) These investments exclude the Québec government's contribution to the projects of partners (e.g. municipalities), whereas this contribution is included in the annual investments of the Québec Infrastructure Plan and portfolio expenditures.<br> (2) Depreciation is included in portfolio expenditures. | (1) These investments exclude the Québec government's contribution to the projects of partners (e.g. municipalities), whereas this contribution is included in the annual investments of the Québec Infrastructure Plan and portfolio expenditures.<br> (2) Depreciation is included in portfolio expenditures. | (1) These investments exclude the Québec government's contribution to the projects of partners (e.g. municipalities), whereas this contribution is included in the annual investments of the Québec Infrastructure Plan and portfolio expenditures.<br> (2) Depreciation is included in portfolio expenditures. | (1) These investments exclude the Québec government's contribution to the projects of partners (e.g. municipalities), whereas this contribution is included in the annual investments of the Québec Infrastructure Plan and portfolio expenditures.<br> (2) Depreciation is included in portfolio expenditures. | (1) These investments exclude the Québec government's contribution to the projects of partners (e.g. municipalities), whereas this contribution is included in the annual investments of the Québec Infrastructure Plan and portfolio expenditures.<br> (2) Depreciation is included in portfolio expenditures. | (1) These investments exclude the Québec government's contribution to the projects of partners (e.g. municipalities), whereas this contribution is included in the annual investments of the Québec Infrastructure Plan and portfolio expenditures.<br> (2) Depreciation is included in portfolio expenditures. | (1) These investments exclude the Québec government's contribution to the projects of partners (e.g. municipalities), whereas this contribution is included in the annual investments of the Québec Infrastructure Plan and portfolio expenditures.<br> (2) Depreciation is included in portfolio expenditures. |

---

G.8 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

❏ **Net debt burden will resume a downward trajectory** 

The net debt burden will stand at 38.8% of GDP as at March 31, 2026. This is lower than the pre-pandemic level, which was 42.9% as at March 31, 2019. As at March 31, 2021, during the pandemic, net debt stood at 43.1% of GDP.

This reduction in indebtedness was achieved against a backdrop of a pandemic, heightened geopolitical tensions caused, among other things, by Russia's invasion of Ukraine, and a trade dispute with the United States.

Net debt to GDP will increase until 2027-2028, due in particular to the significant investments in public infrastructure needed to stimulate economic growth in a context of trade tensions with the United States. It will then fall back to 36.9% of GDP as at March 31, 2031. This will be much lower than the peak reached in 2013-2014, at 53.4% of GDP.

— It should be noted that net debt to GDP will stand at 39.3% as at March 31, 2028, whereas a ratio of 41.9% was forecast in Budget 2025-2026 for that same year.

The government aims to reduce net debt to GDP to 35.5% by 2032-2033 and to 32.5% by 2037-2038.

---

| |
|:---|
| CHART G.2<br>**Net debt as at March 31** |
| (percentage points of GDP) |
| ![](exhibit99-14x002.jpg) |

---

Note: As of April 1, 2026, the concept of net debt will be replaced by that of net financial liabilities due to the coming into force of the new accounting standard on financial statement presentation.

The Québec<br> Government's Debt G.9

------

❏ **The net debt burden is lower than it was as at March 31, 2019** 

As at March 31, 2026, net debt will stand at 38.8% of GDP, compared to 42.9% as at March 31, 2019. Over the last seven years, net debt to GDP will thus have fallen 4.1 percentage points despite the pandemic, major investments in public infrastructure and reinvestment in public services, notably to improve working conditions for public and parapublic sector employees. The decrease in the net debt burden is largely explained by strong nominal economic growth during this period.

More specifically, from March 31, 2019 to March 31, 2026:

— deficits resulted in a 3.4-percentage-point increase in the net debt burden;

— net capital investments resulted in a 7.1-percentage-point increase in the net debt burden;

— the increase in nominal GDP resulted in a 13.6-percentage-point decrease in the net debt burden.

---

| |
|:---|
| CHART G.3<br>**Factors responsible for the change in the government's net debt from 2019 to 2026** |
| (percentage points of GDP) |
| ![](exhibit99-14x003.jpg) |

---

Note: Totals may not add due to rounding.

(1) For example, revaluation gains related to government enterprises.

G.10 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

❏ **Downward adjustment to net debt since the March 2025 budget**

For each year of the financial framework, the projected net debt is lower than it was in March 2025. This is due to smaller deficits from 2024-2025 to 2026-2027 and the new accounting standard on financial statement presentation, which will result in lower net debt as of 2026-2027. The level of GDP is also higher, which helps reduce the net debt burden.

Net debt is lower despite the higher investments in public infrastructure announced in this budget.

TABLE G.3

**Adjustments to net debt as at March 31 since the March 2025 budget**<br>(millions of dollars, unless otherwise indicated)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2026** | **2027** | **2028** | **2029** | **2030** |
| **March 2026** | **250 289** | **259 509** | **271 141** | **276 806** | **279 304** |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *38.8* | *38.9* | *39.3* | *38.8* | *37.9* |
| **March 2025** | **255 003** | **270 435** | **282 588** | **286 431** | **288 149** |
| &nbsp;&nbsp;&nbsp;&nbsp;*% of GDP* | *40.4* | *41.5* | *41.9* | *41.0* | *39.8* |
| **Adjustments** | **-4 714** | **-10 926** | **-11 447** | **-9 625** | **-8 845** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***-1.6*** | ***-2.6*** | ***-2.6*** | ***-2.2*** | ***-1.9*** |

---

The Québec<br> Government's Debt G.11

------

❏ **Comparison of the net debt of governments in Canada**

As at March 31, 2026, Québec's net debt burden will stand at 38.8% of GDP, compared to the provincial average of 30.4%.<sup>2</sup> The government aims to reduce net debt to GDP to 32.5% by 2037-2038.

Over the period covered by its financial framework, Québec expects its net debt to GDP to decline, while other provinces expect their indebtedness to increase.

---

| |
|:---|
| CHART G.4<br>**Net debt of governments in Canada as at March 31, 2026** |
| (percentage of GDP) |
| ![](exhibit99-14x004.jpg) |

---

(1) GDP-weighted average.

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

Sources: Governments' budget documents and Statistics Canada.

<sup>_______________________________________</sup>

<sup>2</sup> The provincial average was 28.9% as at March 31, 2025.

G.12 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

Quebec is one of the only provinces, along with Ontario and New Brunswick, to have reduced its debt since 2019.

---

| |
|:---|
| GRAPHIQUE G.5<br>**Changes in the net debt burden of Canada's provinces** **between March 31, 2019 and March 31, 2026** |
| (percentage of GDP) |
| ![](exhibit99-14x005.jpg) |

---

Sources: Governments' public accounts, budget documents and Statistics Canada.

The Québec<br> Government's Debt G.13

------

---

| |
|:---|
| **Average debt ratio of the provinces is increasing** |
| The average debt ratio of the provinces is currently increasing. While the average net debt to GDP of the provinces stood at 28.5% as at March 31, 2023, it is projected to rise to 30.4% of GDP as at March 31, 2026, representing an increase of 1.9 percentage points. Québec's net debt to GDP is following the same trend, but to a lesser extent. From 2023 to 2026, it rose from 37.5% to 38.8%, an increase of 1.3 percentage points.<br>The gap between Québec and the provincial average is currently smaller than it was in 2019. |
| **Comparison of Québec's net debt with the provincial average as at March 31** |
| (percentage of GDP and percentage points) |
| ![](exhibit99-14x006.jpg) |
| (1) GDP-weighted average.<br>Sources: Governments' public accounts, budget documents and Statistics Canada. |
| This increase in indebtedness can also be seen worldwide. For advanced economies, the IMF estimated in October 2025<sup>1</sup> that average gross debt had risen from 109.3% of GDP in 2022 to 110.2% in 2025 and that it would continue to increase. The IMF expects it to reach 118.5% of GDP in 2030.<sup>2</sup><br>The deterioration in public finances, both in Canada and worldwide, is occurring against a backdrop of moderate economic growth and rising borrowing costs for governments, following a period of low interest rates. Population aging in advanced economies is also putting pressure on public finances.<br>In this regard, the provinces are facing significant pressures in the health sector, but also in the proper maintenance of infrastructure, which, in the case Québec, was often built in the 1960s and 1970s, or even earlier, especially regarding hospitals.<br>It is in this context that Québec, like the other provinces, is requesting additional federal transfers for health and infrastructure. |

---

1 IMF Fiscal Monitor, October 2025.

2 According to the IMF, gross debt corresponds to all liabilities of public administrations, except for commitments related to pension plans. It cannot be compared to the Québec government's concept of gross debt. <br>

G.14 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

1.3 **Gross debt**

Gross debt corresponds to the amount of debt contracted on financial markets (direct debt) plus the net liability for the pension plans and other future benefits of public and parapublic sector employees, minus the balance of the Generations Fund.

The gross debt burden will stand at 42.3% of GDP as at March 31, 2026. This is below the target for reducing gross debt to 45% of GDP by 2025-2026 that had been set in 2010.

Due in particular to significant investments in public infrastructure, needed to stimulate economic growth in a context of trade tensions with the United States, gross debt to GDP is expected to increase by 2027-2028. The gross debt burden will subsequently decline.

Furthermore, as of 2027-2028, sums accumulated to pay the retirement benefits of government employees are projected to exceed the government's liability in this regard. In the coming years, the government can thus plan for an increase in the amount withdrawn annually from the Retirement Plans Sinking Fund to provide for the retirement benefits of government employees. Annual withdrawals of $2.5 billion are currently forecast.

As of 2026-2027, a steady increase in the Generations Fund is also forecast. The balance of this fund will be $29.1 billion as at March 31, 2031.

TABLE G.4

**Gross debt as at March 31**<br>(millions of dollars, unless otherwise indicated)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** | **2031** |
| Direct debt | 269 519 | 286 964 | 307 570 | 325 369 | 339 573 | 350 288 | 360 771 |
| &nbsp;&nbsp;&nbsp;&nbsp;Plus: Pension plans and other employee future benefits<sup>(1)</sup> | 3 335 | 2 324 | 798 | -946 | -3 419 | -6 557 | -10 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Generations Fund | -16 855 | -16 644 | -18 323 | -20 814 | -23 430 | -26 210 | -29 128 |
| **GROSS DEBT** | **255 999** | **272 644** | **290 045** | **303 609** | **312 724** | **317 521** | **321 451** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***41.5*** | ***42.3*** | ***43.5*** | ***44.0*** | ***43.8*** | ***43.0*** | ***42.2*** |

---

(1) A positive entry represents a net liability while a negative entry represents a net asset.

The Québec<br> Government's Debt G.15

------

---

| | |
|:---|:---|
| **The proportion of revenue dedicated to debt service**<br>**will remain at historically low levels** | **The proportion of revenue dedicated to debt service**<br>**will remain at historically low levels** |
| Gross debt and debt service as proportions of revenue are two key financial indicators monitored by credit rating agencies. Debt service as a proportion of revenue, which will stand at 6.2% in 2026-2027, is expected to increase in future years. However, it will remain well below the level reached in the early 2010s.<br>Debt service will stand at $10.3 billion in 2026-2027. This is the fourth-largest expenditure item after health and social services, education and higher education. | Gross debt and debt service as proportions of revenue are two key financial indicators monitored by credit rating agencies. Debt service as a proportion of revenue, which will stand at 6.2% in 2026-2027, is expected to increase in future years. However, it will remain well below the level reached in the early 2010s.<br>Debt service will stand at $10.3 billion in 2026-2027. This is the fourth-largest expenditure item after health and social services, education and higher education. |
| **Gross debt as at March 31** | **Debt service** |
| (percentage of revenue) | (percentage of revenue) |
| ![](exhibit99-14x007.jpg) | ![](exhibit99-14x008.jpg) |
| The uncertain economic situation, the evolution of interest rates and the high level of debt require prudence and the sound management of public finances, because higher-than-anticipated interest rates would have a substantial impact on the financial framework.<br>Interest rates 1 percentage point higher than expected for a full year would increase interest expenditure by $654 million in the first year, $1.8 billion in the fifth year and $2.6 billion in the tenth year.<br>The impact is increasing, as only a portion of the debt is refinanced each year. The average maturity of the debt was 11 years as at March 31, 2025. | The uncertain economic situation, the evolution of interest rates and the high level of debt require prudence and the sound management of public finances, because higher-than-anticipated interest rates would have a substantial impact on the financial framework.<br>Interest rates 1 percentage point higher than expected for a full year would increase interest expenditure by $654 million in the first year, $1.8 billion in the fifth year and $2.6 billion in the tenth year.<br>The impact is increasing, as only a portion of the debt is refinanced each year. The average maturity of the debt was 11 years as at March 31, 2025. |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Impact on interest expenditure of a 1-percentage-point rise in interest rates**<br>(millions of dollars) | **Impact on interest expenditure of a 1-percentage-point rise in interest rates**<br>(millions of dollars) | **Impact on interest expenditure of a 1-percentage-point rise in interest rates**<br>(millions of dollars) | **Impact on interest expenditure of a 1-percentage-point rise in interest rates**<br>(millions of dollars) | **Impact on interest expenditure of a 1-percentage-point rise in interest rates**<br>(millions of dollars) | **Impact on interest expenditure of a 1-percentage-point rise in interest rates**<br>(millions of dollars) |
|  | **1st year** | **2nd year** | **3rd year** | **4th year** | **5th year** |
| Impact | 654 | 1 016 | 1 293 | 1 548 | 1 787 |

---

G.16 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

TABLE G.5

**Factors responsible for the change in gross debt**<br>(millions of dollars, unless otherwise indicated)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Debt, beginning<br>of year** | **Accounting deficit<br> (surplus)<sup>(1)</sup>** | **Investments,**<br>**loans and advances** | **Net capital<br>investments** | **Other<br> factors<sup>(2)</sup>** | **Total**<br>**change** | **Debt, end**<br>**of year** | ***% of***<br>***GDP*** |
| 2024-2025 | 245 832 | 5 175 | 2 205 | 9 888 | -7 101 | 10 167 | 255 999 | *41.5* |
| 2025-2026 | 255 999 | 7 655 | 2 690 | 8 105 | -1 805 | 16 645 | 272 644 | *42.3* |
| 2026-2027 | 272 644 | 6 265 | 2 554 | 8 790 | -208 | 17 401 | 290 045 | *43.5* |
| 2027-2028 | 290 045 | 3 204 | 1 791 | 8 694 | -125 | 13 564 | 303 609 | *44.0* |
| 2028-2029 | 303 609 | -1 116 | 2 766 | 7 047 | 418 | 9 115 | 312 724 | *43.8* |
| 2029-2030 | 312 724 | -2 780 | 2 271 | 5 544 | -238 | 4 797 | 317 521 | *43.0* |
| 2030-2031 | 317 521 | -2 918 | 2 973 | 5 222 | -1 347 | 3 930 | 321 451 | *42.2* |

---

(1) From 2027-2028 to 2030-2031, the accounting balance includes the gap to be bridged.

(2) The decrease in gross debt in 2024-2025 and 2025-2026 is notably due to the disposition of temporary investments acquired prior to 2024-2025. Other factors in 2026-2027 include a $1.8-billion deposit in the Generations Fund to reduce gross debt and taken from the cumulative surplus of the Electrification and Climate Change Fund.

The Québec<br> Government's Debt G.17

------

---

| |
|:---|
| **Investments, loans and advances** |
| &nbsp;&nbsp; The government makes investments, in the form of investments, loans and advances, in private businesses, in particular through the Economic Development Fund, as well as in state-owned enterprises.<br> A state-owned enterprise may be authorized to keep part of its net earnings.<br> — For example, Hydro-Québec pays the government an annual dividend corresponding to 75% of its net earnings. Hydro-Québec uses the portion of net earnings not paid to the government (25%) to finance its requirements.<br> For the government, this constitutes an investment that creates a financial requirement and thus an increase in gross debt. |

---

G.18 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

1.4 **Debt representing accumulated deficits**

Debt representing accumulated deficits corresponds to the difference between the government's assets and liabilities. It is the debt that does not correspond to any assets. The federal government uses this concept to present the changes in its debt.

As at March 31, 2026, the debt representing Québec's accumulated deficits will stand at $130.4 billion, or 20.2% of GDP. This is above the target for reducing the debt representing accumulated deficits to 17% of GDP by 2025-2026 that had been set in 2010.

— This target will not be met, in particular due to accounting changes. One of these concerns the change in the application of the accounting standard respecting transfer payments, which resulted in an increase in debt representing accumulated deficits of $13.0 billion, or 2.9 percentage points of GDP, as at March 31, 2021. The government made this change in 2021, in accordance with the recommendation of the Auditor General of Québec in this regard.

Due to budgetary deficits, the debt burden representing accumulated deficits will increase until 2026-2027. It will then decrease to stand at 17.3% of GDP as at March 31, 2031.

TABLE G.6

**Factors responsible for the change in debt representing accumulated deficits**<br>(millions of dollars, unless otherwise indicated)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Debt,<br>beginning<br>of year** | **Accounting<br> deficit<br> (surplus)<sup>(1)</sup>** | **Accounting<br> adjustments<sup>(2)</sup>** | **Total<br>change** | **Debt,**<br>**end of year** | ***% of<br>GDP*** |
| 2024-2025 | 118 305 | 5 175 | 932 | 6 107 | 124 412 | *20.2* |
| 2025-2026 | 124 412 | 7 655 | -1 634 | 6 021 | 130 433 | *20.2* |
| 2026-2027 | 130 433 | 6 265 | -266 | 5 999 | 136 432 | *20.5* |
| 2027-2028 | 136 432 | 3 204 | -266 | 2 938 | 139 370 | *20.2* |
| 2028-2029 | 139 370 | -1 116 | -266 | -1 382 | 137 988 | *19.3* |
| 2029-2030 | 137 988 | -2 780 | -266 | -3 046 | 134 942 | *18.3* |
| 2030-2031 | 134 942 | -2 918 | -266 | -3 184 | 131 758 | *17.3* |

---

Note: As of April 1, 2026, the debt representing accumulated deficits will be renamed "net liabilities," due to the coming into force of the new accounting standard on financial statement presentation.

(1) From 2027-2028 to 2030-2031, the accounting balance includes the gap to be bridged.

(2) Accounting adjustments include the impact of revaluation elements on debt representing accumulated deficits. As at March 31, 2025, the increase in debt representing accumulated deficits is mainly due to revaluation losses related to derivative financial instruments. As at March 31, 2026, gains are expected instead, which will generate a reduction in the debt representing accumulated deficits. These variations will have no permanent effect on debt.

The Québec<br> Government's Debt G.19

------

The debt burden representing accumulated deficits has fallen significantly since March 31, 2014, when it reached 36.3% of GDP. The projected level as at March 31, 2031, is 17.3% of GDP.

---

| |
|:---|
| CHART G.6<br>**Debt representing accumulated deficits as at March 31** |
| (percentage of GDP) |
| ![](exhibit99-14x009.jpg) |

---

G.20 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Québec's public sector debt** | **Québec's public sector debt** | **Québec's public sector debt** | **Québec's public sector debt** | **Québec's public sector debt** | **Québec's public sector debt** |
| The public sector debt includes the government's gross debt, the debt of Hydro-Québec, the debt of municipalities as well as the debt of universities other than the Université du Québec and its constituents. This debt has served, in particular, to fund public infrastructure, such as roads, schools, hospitals, hydroelectric dams and water treatment plants.<br>As at March 31, 2026, Québec's public sector debt will stand at $375.0 billion, or 58.2% of GDP. These figures must, however, be seen in perspective, for they do not take into account the economic value of certain assets held by the government, such as Hydro-Québec, the Société des alcools du Québec and Loto-Québec. | The public sector debt includes the government's gross debt, the debt of Hydro-Québec, the debt of municipalities as well as the debt of universities other than the Université du Québec and its constituents. This debt has served, in particular, to fund public infrastructure, such as roads, schools, hospitals, hydroelectric dams and water treatment plants.<br>As at March 31, 2026, Québec's public sector debt will stand at $375.0 billion, or 58.2% of GDP. These figures must, however, be seen in perspective, for they do not take into account the economic value of certain assets held by the government, such as Hydro-Québec, the Société des alcools du Québec and Loto-Québec. | The public sector debt includes the government's gross debt, the debt of Hydro-Québec, the debt of municipalities as well as the debt of universities other than the Université du Québec and its constituents. This debt has served, in particular, to fund public infrastructure, such as roads, schools, hospitals, hydroelectric dams and water treatment plants.<br>As at March 31, 2026, Québec's public sector debt will stand at $375.0 billion, or 58.2% of GDP. These figures must, however, be seen in perspective, for they do not take into account the economic value of certain assets held by the government, such as Hydro-Québec, the Société des alcools du Québec and Loto-Québec. | The public sector debt includes the government's gross debt, the debt of Hydro-Québec, the debt of municipalities as well as the debt of universities other than the Université du Québec and its constituents. This debt has served, in particular, to fund public infrastructure, such as roads, schools, hospitals, hydroelectric dams and water treatment plants.<br>As at March 31, 2026, Québec's public sector debt will stand at $375.0 billion, or 58.2% of GDP. These figures must, however, be seen in perspective, for they do not take into account the economic value of certain assets held by the government, such as Hydro-Québec, the Société des alcools du Québec and Loto-Québec. | The public sector debt includes the government's gross debt, the debt of Hydro-Québec, the debt of municipalities as well as the debt of universities other than the Université du Québec and its constituents. This debt has served, in particular, to fund public infrastructure, such as roads, schools, hospitals, hydroelectric dams and water treatment plants.<br>As at March 31, 2026, Québec's public sector debt will stand at $375.0 billion, or 58.2% of GDP. These figures must, however, be seen in perspective, for they do not take into account the economic value of certain assets held by the government, such as Hydro-Québec, the Société des alcools du Québec and Loto-Québec. | The public sector debt includes the government's gross debt, the debt of Hydro-Québec, the debt of municipalities as well as the debt of universities other than the Université du Québec and its constituents. This debt has served, in particular, to fund public infrastructure, such as roads, schools, hospitals, hydroelectric dams and water treatment plants.<br>As at March 31, 2026, Québec's public sector debt will stand at $375.0 billion, or 58.2% of GDP. These figures must, however, be seen in perspective, for they do not take into account the economic value of certain assets held by the government, such as Hydro-Québec, the Société des alcools du Québec and Loto-Québec. |
| **Public sector debt as at March 31**<br>(millions of dollars, unless otherwise indicated) | **Public sector debt as at March 31**<br>(millions of dollars, unless otherwise indicated) | **Public sector debt as at March 31**<br>(millions of dollars, unless otherwise indicated) | **Public sector debt as at March 31**<br>(millions of dollars, unless otherwise indicated) | **Public sector debt as at March 31**<br>(millions of dollars, unless otherwise indicated) | **Public sector debt as at March 31**<br>(millions of dollars, unless otherwise indicated) |
|  | **2022** | **2023** | **2024** | **2025** | **2026** |
| Government's gross debt | 211 198 | 226 344 | 245 832 | 255 999 | 272 644 |
| Hydro-Québec | 46 225 | 49 438 | 53 537 | 57 835 | 64 572 |
| Municipalities | 31 263 | 30 952 | 32 414 | 33 830 | 36 200 |
| Universities other than the Université du Québec and its constituents | 1 379 | 1 463 | 1 519 | 1 564 | 1 564 |
| **PUBLIC SECTOR DEBT** | **290 065** | **308 197** | **333 302** | **349 228** | **374 980** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***57.2*** | ***55.4*** | ***57.2*** | ***56.6*** | ***58.2*** |

---

The Québec<br> Government's Debt G.21

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1.5 **The debt reduction objective and the Generations Fund**

❏ **Debt reduction targets**

Québec has made notable progress in reducing its debt load in recent decades.

The *Act to reduce the debt and establish the Generations Fund* was adopted in 2006. By reducing the debt burden, it aims to ensure the long-term financing of the government's main missions as well as a prosperous tomorrow for future generations.

As of 2010, the Act stated that, for fiscal 2025-2026, the gross debt must not exceed 45% of GDP, while the debt representing accumulated deficits must not exceed 17% of GDP. These objectives were set following the 2008 financial crisis and changes to government accounting, which made it impossible to reach the targets established in 2006.

In March 2023, the government announced the replacement of these targets by net debt reduction targets, which were confirmed in December 2023 in the *Act to reduce the debt and establish the Generations Fund*.

— Unlike for gross debt, financial assets that will ultimately be used to reduce debt on financial markets are subtracted from net debt.<sup>3</sup> As at March 31, 2026, net debt to GDP is expected to stand at 38.8%, compared to 42.3% for gross debt.

In the March 2025 budget, an adjustment to the debt reduction targets was announced due to changes in the budgetary situation and the economic context since the March 2023 budget.

— The target for reducing net debt to GDP by 2032-2033 was adjusted from 33.0% to 35.5% and the target for reducing net debt to GDP by 2037-2038 was adjusted from 30.0% to 32.5%. Given the difficulty of forecasting how the economy will change over the long term, the government is continuing to provide an interval for these two targets.

TABLE G.7

**Debt reduction targets announced in the March 2025 budget**

---

| | |
|:---|:---|
| Net debt by 2032-2033 (intermediate target) | 35.5% of GDP (±2.5% of GDP) |
| Net debt by 2037-2038 | 32.5% of GDP (±2.5% of GDP) |

---

<sup>_______________________________________</sup>

<sup>3</sup> However, the Generations Fund is also subtracted from gross debt. <br>

G.22 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

The Ministère des Finances conducts detailed five-year debt forecasts. For information purposes, a projection of the net debt-to-GDP ratio is carried out up to 2037-2038.

Based on this projection, it is expected that:

— net debt to GDP will stand at 35.3% as at March 31, 2033, below the maximum limit of 38.0% of GDP;

— net debt to GDP will stand at 31.5% as at March 31, 2038, below the maximum limit of 35.0% of GDP.

---

| |
|:---|
| CHART G.7<br>**Net debt projection as at March 31** |
| (percentage of GDP) |
| ![](exhibit99-14x010.jpg) |

---

Notes: The dotted lines represent the interval established by the government.

As of April 1, 2026, the concept of net debt will be replaced by that of net financial liabilities due to the coming into force of the new accounting standard on financial statement presentation.

The sustainability of public finances is usually reflected in long-term debt growth that is equivalent to or lower than economic growth.

The Québec government expects a gradual reduction in net debt to GDP as of 2028-2029 and the achievement of debt reduction targets in 2033 and 2038.

This gradual reduction in net debt to GDP will be achieved by maintaining a balanced budget, following deposits of dedicated revenues in the Generations Fund, as of 2029-2030. Annual investments in public infrastructure will also need to stabilize after a period marked by historic investment levels. It should be noted that stronger-than-anticipated economic growth could enable the government to both invest more on behalf of its citizens and accelerate the reduction of the net debt burden.

The Québec<br> Government's Debt G.23

------

❏ **The benefits of reducing the debt burden**

Reducing the debt burden contributes to economic growth by creating a climate of confidence conducive to private investment and higher productivity.

In addition to supporting collective prosperity and contributing to the sustainability of public finances, reducing the debt burden will allow Québec to:

— contribute to intergenerational equity;

— ensure stable funding for the government's main missions, including health and education;

— cope with the costs associated with an aging population;

— implement measures to fight climate change;

— continue to fund substantial investments in public infrastructure;

— ease the tax burden on Quebecers;

— address a new recession or deal with a prolonged period of economic uncertainty;

— increase its financial autonomy within the federation.

G.24 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

---

| |
|:---|
| **The Generations Fund:**<br>**an effective and transparent tool for reducing debt for the last 20 years** |
| &nbsp;&nbsp; The Generations Fund, the implementation of which was announced in Budget 2006-2007, was established in 2006 with the adoption of the *Act to reduce the debt and establish the Generations Fund*. Since its creation, more than $37 billion has been deposited into it.<sup>1</sup> The Generations Fund is an effective and transparent tool that the Québec government adopted to achieve its debt reduction targets. It allows Quebecers to easily identify the amounts allocated each year by the government to reduce debt.<br> — The government has chosen to spread debt reduction efforts over several years so as not to harm the economy and to respect taxpayers' ability to pay.<br> After 20 years of existence, the Generations Fund has proven that the government's strategy has paid off. The debt burden is now much lower than it was in the early 2010s. The amounts allocated annually to the Generations Fund are deposited with<br>the Caisse de dépôt et placement du Québec. The returns generated help accelerate the reduction of the debt burden.<br> — From 2007 to 2025, the average return was 6.1%, compared to an average cost of new borrowing of 3.2%, resulting in a difference of 2.9 percentage points.<br> In addition, the Generations Fund contributes positively to Québec's credit quality and helps maintain Québec's access to capital markets in Canada and abroad.<br> The government intends to continue making annual deposits in the Generations Fund. |

---

1 Payments from 2006-2007 to 2025-2026. The balance of the Generations Fund as at March 31, 2026 is lower than the total amount that has been deposited into it, due to withdrawals made over the years to repay maturing borrowings.

The Québec<br> Government's Debt G.25

------

❏ **Deposits in the Generations Fund**

Since 2006, the Generations Fund has been an important pillar of the debt reduction strategy.

Three sources of revenue are dedicated to the Generations Fund:

— water-power royalties, which are paid by Hydro-Québec and private hydroelectricity producers;<sup>4</sup>

— an additional contribution from Hydro-Québec, set at $650 million per year, taken from the dividend paid by Hydro-Québec to the government;

— income generated by the investment of the sums making up the Generations Fund.

In 2026-2027, revenues dedicated to the Generations Fund will stand at $2.3 billion. They will rise to $2.9 billion in 2030-2031 and $4.1 billion in 2037-2038.

As announced in the November 2025 update, an additional deposit in the Generations Fund will be made in 2026-2027. It will correspond to the cumulative surplus of the Electrification and Climate Change Fund as at March 31, 2026, estimated at $1.8 billion. The decrease in gross debt resulting from this deposit will contribute to intergenerational fairness with a view to ensuring the sustainability of public finances. Deposits in the Generations Fund will therefore total $4.2 billion in 2026-2027.

Legislative provisions were proposed in this regard by the government in Bill 7, *An Act to reduce bureaucracy, increase state efficiency and reinforce the accountability of senior public servants*, which was tabled in the National Assembly on November 5, 2025.

Withdrawals from the Generations Fund to repay borrowings stood at $2.5 billion in 2025-2026. Withdrawals of $2.5 billion are also planned in 2026-2027.

These withdrawals serve to reduce the amounts allocated to the financing program and alleviate debt servicing.

<sup>_______________________________________</sup>

<sup>4</sup> Under the *Watercourses Act* (CQLR, chapter R-13), every holder of hydraulic powers in Québec is required to pay royalties that are adjusted based on the amount of electricity generated.

G.26 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

TABLE G.8

**Generations Fund**<br>(millions of dollars, unless otherwise indicated)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2025-**<br>**2026** | **2026-**<br>**2027** | **2027-**<br>**2028** | **2028-**<br>**2029** | **2029-**<br>**2030** | **2030-**<br>**2031** |
| **Book value, beginning of year<sup>(1)</sup>** | **16 855** | **16 644** | **18 323** | **20 814** | **23 430** | **26 210** |
| **Dedicated revenues** |  |  |  |  |  |  |
| Water-power royalties |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Hydro-Québec | 750 | 829 | 886 | 898 | 942 | 955 |
| &nbsp;&nbsp;&nbsp;&nbsp;Private producers | 120 | 126 | 127 | 130 | 133 | 136 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Subtotal** | **870** | **955** | **1 013** | **1 028** | **1 075** | **1 091** |
| Additional contribution from Hydro-Québec | 650 | 650 | 650 | 650 | 650 | 650 |
| Investment income<sup>(2)</sup> | 769<sup>(3</sup><sup>)</sup> | 742 | 828 | 938 | 1 055 | 1 177 |
| **Total dedicated revenues** | **2 289** | **2 347** | **2 491** | **2 616** | **2 780** | **2 918** |
| Deposit from the Electrification and Climate Change Fund |  | 1 832 |  |  |  |  |
| **Total deposits** | **2 289** | **4 179** | **2 491** | **2 616** | **2 780** | **2 918** |
| Use of the Generations Fund to repay borrowings | -2 500 | -2 500 |  |  |  |  |
| **Book value, end of year** | **16 644** | **18 323** | **20 814** | **23 430** | **26 210** | **29 128** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of net debt*** | ***6.6*** | ***7.1*** | ***7.7*** | ***8.5*** | ***9.4*** | ***10.4*** |
| &nbsp;&nbsp;&nbsp;&nbsp;***% of GDP*** | ***2.6*** | ***2.7*** | ***3.0*** | ***3.3*** | ***3.6*** | ***3.8*** |

---

(1) For information purposes, as at December 31, 2025, the fair value of the Generations Fund was $20.1 billion, $4.0 billion more than its book value, which is the value deducted from the debt. Like the book value, the fair value includes accounts receivable ($0.5 billion as at December 31, 2025).

(2) The investment income of the Generations Fund corresponds to realized investment income (interest income, dividends, gains on disposal of assets, etc.). Therefore, the forecast may be adjusted upward or downward according to when the gains or losses are actually realized. An accounting annual return of 4.4% is expected, corresponding to the historical average.

(3) The higher investment income in 2025-2026 is due to investment income realized following the integration of the Otéra subsidiary by the Caisse de dépôt et placement du Québec.

The Québec<br> Government's Debt G.27

------

---

| | | | |
|:---|:---|:---|:---|
| **Returns of the Generations Fund** | **Returns of the Generations Fund** | **Returns of the Generations Fund** | **Returns of the Generations Fund** |
| The amounts allocated annually to the Generations Fund are deposited with the Caisse de dépôt et placement du Québec. The returns generated help reduce the debt burden.<br>— From 2007 to 2025, the average return was 6.1%, compared to an average cost of new borrowing of 3.2%, resulting in a difference of 2.9 percentage points.<br>— In 2025, the difference stood at 6.5 percentage points. | The amounts allocated annually to the Generations Fund are deposited with the Caisse de dépôt et placement du Québec. The returns generated help reduce the debt burden.<br>— From 2007 to 2025, the average return was 6.1%, compared to an average cost of new borrowing of 3.2%, resulting in a difference of 2.9 percentage points.<br>— In 2025, the difference stood at 6.5 percentage points. | The amounts allocated annually to the Generations Fund are deposited with the Caisse de dépôt et placement du Québec. The returns generated help reduce the debt burden.<br>— From 2007 to 2025, the average return was 6.1%, compared to an average cost of new borrowing of 3.2%, resulting in a difference of 2.9 percentage points.<br>— In 2025, the difference stood at 6.5 percentage points. | The amounts allocated annually to the Generations Fund are deposited with the Caisse de dépôt et placement du Québec. The returns generated help reduce the debt burden.<br>— From 2007 to 2025, the average return was 6.1%, compared to an average cost of new borrowing of 3.2%, resulting in a difference of 2.9 percentage points.<br>— In 2025, the difference stood at 6.5 percentage points. |
| **Comparison of the Generations Fund's annual return and the Québec government's borrowing costs**<br>(per cent, unless otherwise indicated, on a calendar year basis) | **Comparison of the Generations Fund's annual return and the Québec government's borrowing costs**<br>(per cent, unless otherwise indicated, on a calendar year basis) | **Comparison of the Generations Fund's annual return and the Québec government's borrowing costs**<br>(per cent, unless otherwise indicated, on a calendar year basis) | **Comparison of the Generations Fund's annual return and the Québec government's borrowing costs**<br>(per cent, unless otherwise indicated, on a calendar year basis) |
|  | **Rate of return of**<br>**the Generations Fund** | **Cost of new<br>borrowings<sup>(1)</sup>** | ***Difference***<br>*(percentage points)* |
| 2007 | 5.6 | 4.7 | *0.9* |
| 2008 | -22.4 | 4.5 | *-26.9* |
| 2009 | 11.3 | 4.4 | *6.9* |
| 2010 | 12.3 | 4.1 | *8.2* |
| 2011 | 4.0 | 3.7 | *0.3* |
| 2012 | 8.4 | 3.0 | *5.4* |
| 2013 | 12.0 | 3.3 | *8.7* |
| 2014 | 11.7 | 3.2 | *8.5* |
| 2015 | 8.1 | 2.4 | *5.7* |
| 2016 | 7.3 | 2.2 | *5.1* |
| 2017 | 8.5 | 2.5 | *6.0* |
| 2018 | 4.4 | 2.9 | *1.5* |
| 2019 | 9.5 | 2.3 | *7.2* |
| 2020 | 7.0 | 1.5 | *5.5* |
| 2021 | 11.4 | 1.9 | *9.5* |
| 2022 | -7.9 | 3.5 | *-11.4* |
| 2023 | 9.3 | 4.1 | *5.2* |
| 2024 | 10.4 | 4.1 | *6.3* |
| 2025 | 10.4 | 3.9 | *6.5* |
| (1) The government's borrowing costs correspond to the yield on 10-year maturity Québec bonds.<br>Source: PC-Bond for the yield on 10-year maturity Québec bonds. | (1) The government's borrowing costs correspond to the yield on 10-year maturity Québec bonds.<br>Source: PC-Bond for the yield on 10-year maturity Québec bonds. | (1) The government's borrowing costs correspond to the yield on 10-year maturity Québec bonds.<br>Source: PC-Bond for the yield on 10-year maturity Québec bonds. | (1) The government's borrowing costs correspond to the yield on 10-year maturity Québec bonds.<br>Source: PC-Bond for the yield on 10-year maturity Québec bonds. |

---

G.28 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

**2. FINANCING**

2.1 **Financing program**

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

For 2025-2026, the program stands at $32.1 billion, which is $2.4 billion more than projected in the March 2025 budget.

This adjustment is primarily due to pre-financing carried out in 2025-2026 and an increase in repayments of borrowings. These elements are partially offset by a reduction in net financial requirements, an increase in the use of pre-financing and an increase in the balance of transactions under the credit policy.

As at March 6, 2026, the financing program is completed for 2025-2026, and $9.3 billion in pre-financing has been carried out for 2026-2027.

TABLE G.9

**Government's financing program in 2025-2026**<br>(millions of dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | **March 2025** | **Adjustments** | **March 2026** |
| Net financial requirements | 29 084 | -4 338 | 24 746 |
| Repayments of borrowings | 16 899 | 2 096 | 18 995 |
| Use of the Generations Fund to repay borrowings | -2 500 |  | -2 500 |
| Withdrawal from the Accumulated Sick Leave Fund |  | -180 | -180 |
| Withdrawal from the Retirement Plans Sinking Fund | -2 500 |  | -2 500 |
| Use of pre-financing | -9 322 | -3 430 | -12 752 |
| Transactions under the credit policy<sup>(1)</sup> |  | -1 014 | -1 014 |
| Increase in the outstanding amount of Québec Treasury bills | -2 000 |  | -2 000 |
| Pre-financing |  | 9 264 | 9 264 |
| **TOTAL** | **29 661** | **2 398** | **32 058** |

---

Notes: A negative entry indicates a source of financing and a positive entry, a financial requirement.

Totals may not add due to rounding.

(1) Under the credit policy, which is designed to limit counterparty risk, the government disburses or receives sums in response to exchange rate movements, among other things. These sums do not affect the debt.

The Québec<br> Government's Debt G.29

------

The financing program will stand at $26.2 billion in 2026-2027.

For the four subsequent years, from 2027-2028 to 2030-2031, it will average $31.1 billion.

TABLE G.10

**Government's financing program from 2026-2027 to 2030-2031**<br>(millions of dollars)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2026-<br>2027** | **2027-<br>2028** | **2028-<br>2029** | **2029-<br>2030** | **2030-<br>2031** |
| Net financial requirements | 26 040 | 20 799 | 17 217 | 13 638 | 13 390 |
| Repayments of borrowings | 14 448 | 13 143 | 14 535 | 17 727 | 23 958 |
| Use of the Generations Fund to repay borrowings | -2 500 |  |  |  |  |
| Withdrawal from the Retirement Plans Sinking Fund | -2 500 | -2 500 | -2 500 | -2 500 | -2 500 |
| Use of pre-financing | -9 264 |  |  |  |  |
| **TOTAL** | **26 224** | **31 442** | **29 252** | **28 865** | **34 848** |

---

Note: A negative entry indicates a source of financing and a positive entry, a financial requirement.

G.30 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

2.2 **Borrowings contracted in 2025-2026**

The government aims to achieve stable financing at the lowest possible cost. To that end, it applies a strategy of diversifying sources of funding by market, financial instrument and maturity.

As at March 6, 2026, 47% of the borrowings contracted by the government in 2025-2026 were made on foreign markets, compared to an average of 31% over the past 10 years. In January 2026, Québec carried out its largest bond issue in any currency. A borrowing of US$4.5 billion (C$6.2 billion) with a five-year maturity was issued at a cost equivalent to that of issues on the Canadian market. It was also the largest foreign currency issue by a province at the time. Québec plans to continue to take advantage of opportunities to issue on foreign markets.

In 2025-2026, conventional bonds in Canadian dollars are the main debt instrument used.

The average cost of borrowings contracted in 2025-2026 was 3.84% with an average maturity of borrowings of 13 years, while the cost of the entire debt was 3.69% with an average remaining maturity of 11 years as at March 31, 2025.

TABLE G.11

**Summary of long-term borrowings contracted in 2025-2026**

---

| | | |
|:---|:---|:---|
| **Currencies** | **$million** | **%** |
| **CANADIAN DOLLAR** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Conventional bonds | 15 186 | 47.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Floating-rate notes | 1 500 | 4.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings products issued by Épargne Placements Québec | 164 | 0.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Immigrant investors<sup>(1)</sup> | 4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Subtotal** | **16 854** | **52.6** |
| **OTHER CURRENCIES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. dollar | 8 972 | 28.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Euro | 4 669 | 14.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Australian dollar | 798 | 2.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Swiss franc | 765 | 2.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Subtotal** | **15 205** | **47.4** |
| **TOTAL** | **32 058** | **100.0** |

---

Notes: Borrowings contracted as at March 6, 2026.

Totals may not add due to rounding.

(1) These borrowings are from sums advanced by immigrant investors. These sums are lent to the government through Investissement Québec.

The Québec<br> Government's Debt G.31

------

---

| |
|:---|
| **Funding of public bodies** |
| The Financing Fund allows public bodies to obtain financing on favourable terms, namely the government borrowing rate, plus issuance and service fees.<br>The principle of pooled financing is applied: the government borrows on financial markets and advances funds to the Financing Fund. The Fund then uses these sums to grant loans to public bodies, notably for carrying out their investment projects.<br>The clientele of the Financing Fund consists mainly of bodies in the education, higher education and health and social services networks, non-budget-funded bodies, government enterprises, special funds as well as certain bodies designated by the government.<br>In fiscal 2025-2026, the Financing Fund's short-term and long-term loan programs stand at $11.4 billion and $8.8 billion, respectively.<br>— These amounts are included in the government's net financial requirements. |
| **Financing Fund's loan programs in 2025-2026** |
| (millions of dollars) |
| ![](exhibit99-14x011.jpg) |
| Note: The short-term financing program represents the average outstanding amount of short-term loans, while the long-term financing program is presented on the basis of total loans issued for the year.<br>(1) This category includes school service centres, school boards, CEGEPs, the Université du Québec and its constituents, and private universities.<br>(2) This category includes facilities serving northern and Indigenous communities and Santé Québec.<br>(3) Montreal Museum of Fine Arts. |

---

G.32 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

2.3 **Debt management strategy**

The government's debt management strategy aims to minimize the cost of debt while limiting the risks related to fluctuations in foreign exchange and interest rates.

The government uses a range of financial instruments, particularly interest rate and currency swap agreements (swaps), to achieve desired debt proportions by currency and interest rate.

❏ **Structure of debt by currency**

As at March 31, 2026, before taking swaps into account, 74% of the debt is expected to be in Canadian dollars, 12% in U.S. dollars, 11% in euros, 1% in Australian dollars, 1% in pounds sterling, 1% in Swiss francs, and less than 1% in other foreign currencies (Swedish kronor, yen and New Zealand dollars).

After taking swaps into account, the entire debt is denominated in Canadian dollars.

The government maintains no exposure to foreign currencies of its debt issued on financial markets. This is done to neutralize the impact of exchange rate variations on debt service.

TABLE G.12

**Expected structure of debt by currency as at March 31, 2026**<br>(per cent)

---

| | | |
|:---|:---|:---|
|  | **Before swaps** | **After swaps** |
| Canadian dollar | 74 | 100 |
| U.S. dollar | 12 |  |
| Euro | 11 |  |
| Australian dollar | 1 |  |
| Pound sterling | 1 |  |
| Swiss franc | 1 |  |
| Other (Swedish krona, yen and New Zealand dollar) | -<sup>(1)</sup> |  |
| **TOTAL** | **100** | **100** |

---

Notes: This is the debt issued on financial markets by the government.

Totals may not add due to rounding.

(1) The proportion of debt attributable to other currencies before swaps is less than 1%.

The Québec<br> Government's Debt G.33

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❏ **Structure of debt by type of interest rate**

The government keeps part of its debt at fixed interest rates and part at floating interest rates.

As at March 31, 2026, after taking swaps into account, the share of debt subject to an interest rate change in 2026-2027 is expected to stand at 16.0%. This share includes debt at floating interest rates (11.7%) as well as debt at fixed interest rates to be refinanced in 2026-2027 (4.3%).

The proportion of debt at fixed interest rates is expected to be 88.3%, made up of 84.0% of debt maturing in more than one year and 4.3% of debt to be refinanced in 2026-2027.

---

| |
|:---|
| CHART G.8<br>**Expected structure of debt by type of interest rate as at March 31, 2026** |
| ![](exhibit99-14x012.jpg) |

---

Notes: This is the debt issued on financial markets by the government.

Percentages may not total 100% due to rounding.

G.34 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

❏ **Debt maturity**

Maturities of new borrowings are distributed over time to ensure a stable refinancing profile as well as the government's regular presence on financial markets. To date, approximately 75% of the borrowings contracted in 2025-2026 had a maturity of 10 years or more. The average share of issues for these terms over the last 10 years represents 77%. The average maturity of borrowings in 2025-2026 is 13 years.

---

| |
|:---|
| CHART G.9<br>**Maturity of transactions carried out in 2025-2026** |
| ![](exhibit99-14x013.jpg) |

---

Notes: Borrowings contracted as at March 6, 2026.

Percentages may not total 100% due to rounding.

The diversification of borrowings by term is reflected on the debt maturity profile as shown in the following chart. As at March 31, 2026, the average maturity of the debt is expected to be 11 years.

---

| |
|:---|
| CHART G.10<br>**Expected maturity of long-term debt as at March 31, 2026** |
| (millions of dollars) |
| ![](exhibit99-14x014.jpg) |

---

Note: This is the Québec government's long-term debt issued on financial markets, minus the balance of the Sinking Fund for Government Borrowing.

The Québec<br> Government's Debt G.35

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2.4 **Yield on the Québec government's securities**

In February 2026, the yield on 3-month Québec Treasury bills stands at 2.3%, its lowest level since June 2022. The yield on Québec 10-year securities stands at 3.8%, after reaching 4.8% in October 2023. The decline in yields in recent months reflects the gradual reduction in the Bank of Canada's policy rate since June 2024.

---

| |
|:---|
| CHART G.11<br>**Yield on the Québec government's securities** |
| (per cent) |
| ![](exhibit99-14x015.jpg) |

---

Sources: PC-Bond and Ministère des Finances du Québec.

G.36 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

In 2024, there was an increase in the spread between Québec and Ontario. At that point, the spread shifted from favourable for Québec to unfavourable. In fall 2025, there was a more pronounced increase in the spread. In February 2026, the spread was around 8 basis points.

---

| |
|:---|
| CHART G.12<br>**Yield spread on long-term (10-year) securities since 2015** |
| (percentage points) |
| ![](exhibit99-14x016.jpg) |

---

Sources: PC-Bond and Ministère des Finances du Québec.

The Québec-Ontario spread and the British Columbia-Ontario spread are trending upward. Since fall 2025, the Québec-Ontario spread has been deteriorating compared to the British Columbia-Ontario spread.

---

| |
|:---|
| CHART G.13<br>**Yield spread on long-term (10-year) securities since 2021** |
| (percentage points) |
| ![](exhibit99-14x017.jpg) |

---

Sources: PC-Bond and Ministère des Finances du Québec.

The Québec<br> Government's Debt G.37

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![](exhibit99-14xu001.jpg)

**3. PENSION PLANS AND FUNDS**<br>**DEPOSITED BY THE MINISTÈRE DES FINANCES <br>WITH THE CAISSE DE DÉPÔT ET PLACEMENT**<br>**DU QUÉBEC**

3.1 **Net liability for pension plans**

The government covers its share of the funding of its employees' pension plans. These are defined-benefit plans.

In its financial statements, it discloses its pension obligations, which correspond to the present value of the retirement benefits that it will pay to its employees. These obligations are re-evaluated annually. The result is the pension plans liability.

Sums are accumulated in the Retirement Plans Sinking Fund (RPSF) and other funds to pay retirement benefits. The value of these assets is subtracted from the liability to measure the government's net commitment, called the net pension plans liability. This amount is included in the government's debt.

As at March 31, 2025, the net liability for pension plans and other employee future benefits stood at $3.3 billion.

TABLE G.13

**Net liability for pension plans and other employee future benefits as at March 31, 2025**<br>(millions of dollars)

---

| | |
|:---|:---|
| **Liabilities** |  |
| &nbsp;&nbsp;&nbsp;Pension plan liability<sup>(1)</sup> | 129 950 |
| &nbsp;&nbsp;&nbsp;Other employee future benefits liability | 1 281 |
| **Liability for pension plans and other employee future benefits** | **131 231** |
| **Assets** |  |
| &nbsp;&nbsp;&nbsp;Retirement Plans Sinking Fund (RPSF) and other funds<sup>(2)</sup> | -126 550 |
| &nbsp;&nbsp;&nbsp;Funds dedicated to other employee future benefits | -1 346 |
| **Asset for pension plans and other employee future benefits** | **-127 896** |
| **NET LIABILITY FOR PENSION PLANS AND OTHER EMPLOYEE FUTURE BENEFITS** | **3 335** |

---

(1) Mainly the Government and Public Employees Retirement Plan (RREGOP) and the Pension Plan of Management Personnel (PPMP).

(2) The value of the RPSF stands at $119.5 billion. The other funds consist mainly of that of the Pension Plan of the Université du Québec. For the RPSF, this is the book value. For information purposes, as at December 31, 2025, the market value of the RPSF was $131.2 billion.

The Québec<br> Government's Debt G.39

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---

| |
|:---|
| **The Retirement Plans Sinking Fund**<br>**in proportion to actuarial obligations** |

| **Book value of the RPSF in proportion to the government's actuarial obligations in respect of the pension plans of public and parapublic sector employees as at March 31** |
| (per cent) |
| ![](exhibit99-14x018.jpg) |

---

G.40 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

3.2 **Returns on funds deposited with the Caisse de dépôt et placement du Québec**

The main funds deposited by the Ministère des Finances with the Caisse de dépôt et placement du Québec (RPSF, Generations Fund and Accumulated Sick Leave Fund [ASLF]) are managed in accordance with investment policies established by the Ministère des Finances in cooperation with representatives of the Caisse.

These investment policies are established based on several factors, including 10-year return forecasts, standard deviations and correlations for various categories of assets, opportunities for investing in these assets and recommendations of the Caisse.

In 2025, the return on funds deposited by the Ministère des Finances with the Caisse was 8.9% for the RPSF, 10.4% for the Generations Fund and 8.9% for the ASLF.

— The results achieved by the Caisse in 2025 are mainly due to good returns on its investments in equity markets.

— The superior return for the Generations Fund can be explained by differences in its investment policy. The Generations Fund, by its very nature, holds more liquid investments such as publicly traded shares. However, this asset class achieved a high return in 2025.

The investment policies of these three funds are presented on page G.43.

TABLE G.14<br>**2025 return on and market value of funds deposited by**<br> **the Ministère des Finances with the Caisse de dépôt et placement du Québec**

---

| | | |
|:---|:---|:---|
|  | **Rate of return**<br>**in 2025** | **Market value as at**<br>**December 31, 2025** |
|  | (%) | ($billion) |
| Retirement Plans Sinking Fund (RPSF) | 8.9 | 131.2 |
| Generations Fund | 10.4 | 19.5 |
| Accumulated Sick Leave Fund (ASLF) | 8.9 | 0.9 |

---

The Québec<br> Government's Debt G.41

------

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;**Return of 9.3% for the Caisse de dépôt et placement du Québec**<br>**in 2025 and net assets of $517 billion** |
| &nbsp;&nbsp;&nbsp;On February 25, 2026, the Caisse presented its financial results for the fiscal year ended December 31, 2025. The weighted average return on the funds of its 48 depositors is 9.3% over one year, compared to a benchmark portfolio return of 10.9%. This performance exceeds that achieved by the Ontario Teachers' Pension Plan (Teachers) and the Ontario Municipal Employees Retirement System (OMERS), which also released their results. These pension funds achieved a net return after fees of 6.7% and 6.0% respectively in 2025.<br>Over longer periods, which provide a better assessment of the performance of fund managers, the Caisse outperformed its benchmark portfolio: over five years, it achieved a return of 6.5%, compared to 6.2% for the benchmark portfolio; over ten years, it achieved a return of 7.2%, compared to 6.9% for the benchmark portfolio.<br>As at December 31, 2025, the net assets of the Caisse stood at $517 billion, an increase of $152 billion over five years, that is, compared to December 31, 2020.<br>Total assets in Québec stood at $100.1 billion. The goal of $100 billion in Québec was achieved a year earlier than expected.<br>The largest depositor, the Québec Pension Plan (QPP) base plan, Quebecers' nest egg, achieved a return of 9.8% in 2025. Over five years, its return, net of fees, of 7.5% is higher than that posted by the Canada Pension Plan base plan (7.3%). |

---

G.42 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

❏ **Comparison of investment policies**

TABLE G.15

**Investment policies as at January 1, 2026**<br>(per cent)

---

| | | | |
|:---|:---|:---|:---|
| **Specialized portfolio** | **RPSF and ASLF** | **Generations**<br>**Fund** | **Average benchmark**<br>**portfolio of depositors<br>as a whole<sup>(1)</sup>** |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term investments | 1 | 1 | 1.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Rates<sup>(2)</sup> | 9.5 | 9 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit<sup>(3)</sup> | 24.5 | 30 | 21.8 |
| **Total - Fixed Income** | **35.0** | **40.0** | **33.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;Infrastructure | 14.25 | 10 | 13.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate | 9.25 | 6 | 10.8 |
| **Total - Real Assets** | **23.5** | **16.0** | **24.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity markets | 25.5 | 35 | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;Private equity | 16 | 9 | 17 |
| **Total - Equities** | **41.5** | **44.0** | **45.0** |
| **Leverage product** | **-** | **-** | **-2.0** |
| **TOTAL** | **100.0** | **100.0** | **100.0** |

---

RPSF: Retirement Plans Sinking Fund.

ASLF: Accumulated Sick Leave Fund.

(1) Data as at December 31, 2024, drawn from the 2024 Annual Report of the Caisse de dépôt et placement du Québec.

(2) This portfolio consists of government bonds.

(3) Broader range of instruments with fixed income securities characteristics.

The Québec<br> Government's Debt G.43

------

![](exhibit99-14xu001.jpg)

**4. CREDIT RATINGS**

4.1 **Québec's credit ratings**

A credit rating helps measure the ability of a borrower, such as the Québec government, to pay interest on its debt and repay the principal at maturity.

A high credit rating means access to a broader pool of investors and advantageous borrowing costs.

Québec's credit rating is evaluated by five credit rating agencies. The five agencies assign a stable outlook to Québec's credit rating.

TABLE G.16<br>**Québec's credit ratings**

---

| | | |
|:---|:---|:---|
| **Credit rating agency** | **Credit rating** | **Outlook** |
| Moody's | Aa2 | Stable |
| S&P Global | A+ | Stable |
| Fitch Ratings | AA- | Stable |
| Morningstar DBRS | AA (low) | Stable |
| Japan Credit Rating Agency (JCR) | AAA | Stable |

---

Note: Québec's credit ratings as at March 6, 2026.

The Québec<br> Government's Debt G.45

------

4.2 **Comparison of the credit ratings of Canadian provinces**

The following charts show the credit ratings of Canadian provinces assigned by Moody's, S&P Global, Fitch Ratings and Morningstar DBRS.

It should be noted that Moody's gives Québec a higher credit rating than Ontario, while S&P Global and Morningstar DBRS do the opposite.

Fitch Ratings assigns the same credit rating to both provinces.

Québec is not the only province to have been subjected to an unfavourable decision<sup>5</sup> by a rating agency over the past year.

Since January 2025, the economic and financial environment, particularly in relation to the trade dispute with the United States, has led rating agencies to revise downward the credit quality of several other provinces.

— British Columbia's credit rating was downgraded by one notch by Moody's and S&P Global. Fitch Ratings and Morningstar DBRS lowered the outlook associated with British Columbia's credit rating from "stable" to "negative."

— Nova Scotia's credit rating was downgraded by one notch by S&P Global.

— The outlooks associated with Alberta's and Ontario's credit ratings were lowered from "positive" to "stable" by Moody's.

— The outlooks associated with New Brunswick's and Prince Edward Island's credit ratings were lowered from "positive" to "stable" by S&P Global.

<sup>________________________________________</sup>

<sup>5</sup> On April 16, 2025, S&P Global downgraded Québec's credit rating by one notch, from AA- to A+. The agency's decision was mainly due to the increase in infrastructure investments needed to stimulate economic growth.

G.46 Budget 2026-2027 <br>Budget Plan

------

![](exhibit99-14xu001.jpg)

---

| |
|:---|
| CHART G.14<br>**Credit rating of Canadian provinces - Moody's** |
| ![](exhibit99-14x019.jpg) |

---

Note: Credit ratings as at March 6, 2026.

(1) This province has a negative outlook.

---

| |
|:---|
| CHART G.15<br>**Credit rating of Canadian provinces - S&P Global** |
| ![](exhibit99-14x020.jpg) |

---

Note: Credit ratings as at March 6, 2026.

(1) These provinces have a negative outlook.

The Québec<br> Government's Debt G.47

------

---

| |
|:---|
| CHART G.16<br>**Credit rating of Canadian provinces - Fitch Ratings** |
| ![](exhibit99-14x021.jpg) |

---

Notes: Five provinces receive a credit rating from Fitch Ratings.

Credit ratings as at March 6, 2026.

(1) This province has a negative outlook.

---

| |
|:---|
| CHART G.17<br>**Credit rating of Canadian provinces - Morningstar DBRS** |
| ![](exhibit99-14x022.jpg) |

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Note: Credit ratings as at March 6, 2026.

(1) This province has a negative outlook.

G.48 Budget 2026-2027 <br>Budget Plan

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![](exhibit99-14xu001.jpg)

**APPENDIX: REPORT ON THE APPLICATION<br> OF THE *ACT TO REDUCE***<br> ***THE DEBT AND ESTABLISH***<br> ***THE GENERATIONS FUND***

❏ **Debt reduction objective**

The *Act to reduce the debt and establish the Generations Fund* stipulates that, for fiscal years 2032-2033 and 2037-2038, the net debt presented in the government's financial statements may not exceed 38.0% and 35.0% of GDP, respectively.

These ratios correspond to the maximum limit of the respective targets of 35.5% and 32.5% of GDP that were reviewed by the government in the March 2025 budget speech. Developments in the budgetary situation since the March 2023 budget called for a review of these targets.

— Given the difficulty of forecasting how the economy will change over the long term, the government is continuing to provide an interval for these two targets.

TABLE G.17<br>**Debt reduction targets announced in the March 2025 budget**

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| | |
|:---|:---|
| Net debt by 2032-2033 (intermediate target) | 35.5% of GDP (±2.5% of GDP) |
| Net debt by 2037-2038 | 32.5% of GDP (±2.5% of GDP) |

---

As at March 31, 2026, Québec's net debt will stand at $250.3 billion, or 38.8% of GDP.

The Ministère des Finances conducts detailed five-year debt forecasts. For information purposes, a projection of the net debt-to-GDP ratio has been made up to 2037-2038.

Based on this projection, it is expected that:

— net debt to GDP will stand at 35.3% as at March 31, 2033, below the maximum limit of 38.0% of GDP;

— net debt to GDP will stand at 31.5% as at March 31, 2038, below the maximum limit of 35.0% of GDP.

The Québec<br> Government's Debt G.49

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❏ **Deposits in the Generations Fund** 

Three sources of revenue are dedicated to the Generations Fund:

— water-power royalties, which are paid by Hydro-Québec and private hydroelectricity producers;

— an additional contribution from Hydro-Québec, set at $650 million per year, taken from the dividend paid by Hydro-Québec to the government;

— income generated by the investment of the sums making up the Generations Fund.

In 2026-2027, revenues dedicated to the Generations Fund will stand at $2.3 billion. They will rise to $2.9 billion in 2030-2031 and $4.1 billion in 2037-2038.

As at March 31, 2026, the balance of the Generations Fund will stand at $16.6 billion, which is 6.6% of net debt.

Withdrawals from the Generations Fund to repay borrowings stood at $2.5 billion in 2025-2026. Withdrawals of $2.5 billion are also planned in 2026-2027.

These withdrawals serve to reduce the amounts allocated to the financing program and alleviate debt servicing.

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| |
|:---|
| CHART G.18<br>**Changes in the book value of the Generations Fund as at March 31** |
| (millions of dollars) |
| ![](exhibit99-14x023.jpg) |

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G.50 Budget 2026-2027 <br>Budget Plan

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## Exhibit 99.15

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Exhibit 99.15

TABLE 1

**Québec government<br>Summary of budgetary transactions<br>Preliminary results for 2025-2026**<br> (millions of dollars)

---

| | |
|:---|:---|
|  | **2025-2026** |
| &nbsp;&nbsp;**REVENUE** |  |
| &nbsp;&nbsp;Own-source revenue | 129 952 |
| &nbsp;&nbsp;Federal transfers | 30 577 |
| &nbsp;&nbsp;**Total** | **160 529** |
| &nbsp;&nbsp;**EXPENDITURE** |  |
| &nbsp;&nbsp;Portfolio expenditures | -158 029 |
| &nbsp;&nbsp;Debt service | -10 155 |
| &nbsp;&nbsp;**Total** | **-168 184** |
| &nbsp;&nbsp;**ACCOUNTING SURPLUS (DEFICIT)<sup>(1)</sup>** | **-7 655** |
| &nbsp;&nbsp;***BALANCED BUDGET ACT*** |  |
| &nbsp;&nbsp;Deposits of dedicated revenues in the Generations Fund | -2 289 |
| &nbsp;&nbsp;**BUDGETARY BALANCE<sup>(2)</sup>** | **-9 944** |

---

(1) Accounting surplus (deficit) refers to the surplus (deficit) from operations as presented in the public accounts.

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

Budget Speech 1 <br> Tables

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TABLE 2

**Québec government<br>Summary of budgetary transactions<br>Forecasts for 2026-2027**<br> (millions of dollars)

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| | |
|:---|:---|
|  | **2026-2027** |
| &nbsp;&nbsp;**REVENUE** | |
| &nbsp;&nbsp;Own-source revenue | 134 361 |
| &nbsp;&nbsp;Federal transfers | 32 131 |
| &nbsp;&nbsp;**Total** | **166 492** |
| &nbsp;&nbsp;**EXPENDITURE** |  |
| &nbsp;&nbsp;Portfolio expenditures | -160 489 |
| &nbsp;&nbsp;Debt service | -10 268 |
| &nbsp;&nbsp;**Total** | **-170 757** |
| &nbsp;&nbsp;Contingency reserve | -2 000 |
| &nbsp;&nbsp;**ACCOUNTING SURPLUS (DEFICIT)<sup>(1)</sup>** | **-6 265** |
| &nbsp;&nbsp;***BALANCED BUDGET ACT*** |  |
| &nbsp;&nbsp;Deposits of dedicated revenues in the Generations Fund | -2 347 |
| &nbsp;&nbsp;**BUDGETARY BALANCE<sup>(2)</sup>** | **-8 612** |

---

(1) Accounting surplus (deficit) refers to the surplus (deficit) from operations as presented in the public accounts.

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

2 Budget 2026-2027 <br> Budget Plan

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Exhibit 99.15 <br>

TABLE 3

**Québec government<br>Revenue<br>Forecasts for 2026-2027**<br> (millions of dollars)

---

| | |
|:---|:---|
|  | **2026-2027** |
| &nbsp;&nbsp;**OWN-SOURCE REVENUE** |  |
| &nbsp;&nbsp;Income and property taxes |  |
| &nbsp;&nbsp; Personal income tax | 50 800 |
| &nbsp;&nbsp; Contributions for health services | 9 412 |
| &nbsp;&nbsp; Corporate taxes | 14 527 |
| &nbsp;&nbsp; School property tax | 1 311 |
|  | **76 050** |
| &nbsp;&nbsp;Consumption taxes |  |
| &nbsp;&nbsp; Sales taxes<sup>(1)</sup> | 26 349 |
| &nbsp;&nbsp; Fuels | 2 097 |
| &nbsp;&nbsp; Tobacco products | 830 |
| &nbsp;&nbsp; Alcoholic beverages | 574 |
| &nbsp;&nbsp; Other<sup>(2)</sup> | 158 |
|  | **30 008** |
| &nbsp;&nbsp;Revenue from government enterprises |  |
| &nbsp;&nbsp; Hydro-Québec | 2 445 |
| &nbsp;&nbsp; Loto-Québec | 1 557 |
| &nbsp;&nbsp; Société des alcools du Québec | 1 406 |
| &nbsp;&nbsp; Investissement Québec | 292 |
| &nbsp;&nbsp; Société québécoise du cannabis | 146 |
| &nbsp;&nbsp; Other | 7 |
|  | **5 853** |
| &nbsp;&nbsp;Duties, permits and royalties | 6 542 |
| &nbsp;&nbsp;Miscellaneous revenue | 15 908 |
| &nbsp;&nbsp;**TOTAL OWN-SOURCE REVENUE** | **134 361** |
| &nbsp;&nbsp;**FEDERAL TRANSFERS** |  |
| &nbsp;&nbsp;Equalization | 13 907 |
| &nbsp;&nbsp;Health transfers | 9 265 |
| &nbsp;&nbsp;Transfers for post-secondary education and other social programs | 1 392 |
| &nbsp;&nbsp;Other programs | 7 567 |
| &nbsp;&nbsp;**TOTAL FEDERAL TRANSFERS** | **32 131** |
| &nbsp;&nbsp;**TOTAL REVENUE** | **166 492** |

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(1) Sales taxes, within the meaning of the public accounts, include, in particular, the QST, the tax on insurance premiums, the tax on lodging and the specific duty on new tires.

(2) These amounts include revenue from the Québec component of the excise duty on vaping products, the Québec component of the excise duty on cannabis sales and pari-mutuel. <br>

Budget Speech 3 <br> Tables

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TABLE 4

**Québec government<br>Expenditure<br>Forecasts for 2026-2027**<br> (millions of dollars)

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| | |
|:---|:---|
|  | **2026-2027** |
| &nbsp;&nbsp;**PORTFOLIO EXPENDITURES** |  |
| &nbsp;&nbsp;National Assembly | 200 |
| &nbsp;&nbsp;Persons appointed by the National Assembly | 297 |
| &nbsp;&nbsp;Affaires municipales et Habitation | 5 608 |
| &nbsp;&nbsp;Agriculture, Pêcheries et Alimentation | 1 531 |
| &nbsp;&nbsp;Conseil du trésor, Administration gouvernementale et Efficacité de l'État | 3 361 |
| &nbsp;&nbsp;Conseil exécutif | 630 |
| &nbsp;&nbsp;Culture et Communications | 2 054 |
| &nbsp;&nbsp;Cybersécurité et Numérique | 353 |
| &nbsp;&nbsp;Économie, Innovation et Énergie | 4 511 |
| &nbsp;&nbsp;Éducation | 24 075 |
| &nbsp;&nbsp;Emploi et Solidarité sociale | 5 952 |
| &nbsp;&nbsp;Enseignement supérieur | 11 749 |
| &nbsp;&nbsp;Environnement, Lutte contre les changements climatiques, Faune et Parcs | 2 004 |
| &nbsp;&nbsp;Famille | 10 009 |
| &nbsp;&nbsp;Finances | 4 087 |
| &nbsp;&nbsp;Immigration, Francisation et Intégration | 756 |
| &nbsp;&nbsp;Justice | 2 039 |
| &nbsp;&nbsp;Langue française | 81 |
| &nbsp;&nbsp;Relations internationales et Francophonie | 148 |
| &nbsp;&nbsp;Ressources naturelles et Forêts | 1 521 |
| &nbsp;&nbsp;Santé et Services sociaux | 68 708 |
| &nbsp;&nbsp;Sécurité publique | 2 876 |
| &nbsp;&nbsp;Tourisme | 552 |
| &nbsp;&nbsp;Transports et Mobilité durable | 7 739 |
| &nbsp;&nbsp;Travail | 248 |
| &nbsp;&nbsp;Reallocation of government expenditures during the fiscal year | -600 |
| &nbsp;&nbsp;**TOTAL** | **160 489** |
| &nbsp;&nbsp;**DEBT SERVICE** | **10 268** |
| &nbsp;&nbsp;**TOTAL EXPENDITURE** | **170 757** |

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Note: Totals may not add due to rounding.

4 Budget 2026-2027 <br> Budget Plan

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