Budget 2020-2021

Tackling the debt

The Act to reduce the debt and establish the Generations Fund was passed on June 15, 2006 with the goal of reducing Québec’s debt burden.

The Generations Fund is a fund dedicated exclusively to repaying Québec’s debt.

So as not to leave future generations the burdensome legacy of having to repay the public debt, the debt reduction objectives to be achieved for 2025-2026 were set in the Act to reduce the debt and establish the Generations Fund.

Debt reduction objectives

The debt reduction objectives included in the Act to reduce the debt and establish the Generations Fund are as follows:

The objective of reducing the gross debt to 45% of GDP has been achieved in 2019-2020, that is, six years ahead of schedule.

As for the objective of reducing the debt representing accumulated deficits to 17% of GDP, it should be achieved in 2022-2023, that is, three years ahead of schedule.

The government intends to define new policy directions on debt reduction within the context of achieving its target in 2022-2023. A reflection process is being launched in this regard.

Sums allocated to the Generations Fund

In order to finance the Generations Fund, we have turned to our most important renewable collective resource: water, Québec’s blue gold.

The Generations Fund is financed by revenue sources dedicated to debt repayment and consisting of, in particular, water-power royalties from Hydro-Québec and private producers of hydroelectricity.

The Generations Fund also receives sums relative to the indexation of the price of heritage electricity, an additional contribution from Hydro-Québec, mining revenues, the specific tax on alcoholic beverages, the liquidation of unclaimed property administered by Revenu Québec, a portion of the proceeds of government asset sales, and gifts, legacies and other contributions received by the Minister of Finance.

The Act also allows the government to order that a part, which it establishes, of any sum that would otherwise have been attributed to the General Fund of the Consolidated Revenue Fund be allocated to the Generations Fund.

The sums allocated to the Generations Fund are deposited with the Caisse de dépôt et placement du Québec and managed in accordance with an investment policy determined by the Minister of Finance, in collaboration with representatives of the Caisse.

The Generations Fund will stand at $11.7 billion as at March 31, 2021

Taking into account the deposits made since the creation of the Fund and those forecast, as well as the use of the fund to repay borrowings on financial markets, the book value of the Generations Fund will stand at $11.7 billion as at March 31, 2021.

Change in the book value of the Generations Fund as at March 31
(millions of dollars)

Change in the book value of the Generations Fund (millions of dollars)

Deposits in the Generations Fund provided for in budget 2020-2021

As part of Budget 2020-2021, the government is projecting deposits of dedicated revenue in the Generations Fund totaling $2.6 billion in 2019-2020, $2.7 billion in 2020-2021, $3.0 billion in 2021-2022, $3.4 billion in 2022-2023, $3.7 billion in 2023-2024 and $4.0 billion in 2024-2025.

These deposits will come from the following sources:

Click here to find out more about Québec’s debt.