(Bloomberg) -- Quebec is sticking to a pledge to balance its budget within five years even as its prepares to run deficits of C$15.3 billion ($11.6 billion) over the next two fiscal years to combat Covid-19.
Quebec’s budget gap will reach C$15 billion in the fiscal year that ends March 31, roughly in line with what the government announced in June, according to new forecasts released by the finance department Thursday. The deficit will narrow to C$8.3 billion in the next fiscal year and to C$7 billion in 2022-2023, it said.
“The government has been involved since the beginning of the pandemic and intends to maintain its support throughout the crisis and ensure economic recovery,” the department said in a press release. “We will return to a balanced budget within five years without cutting services or raising taxes.”
The majority French-speaking province has been the epicenter of the health crisis in Canada. Infections spread into elderly care homes in the spring, killing thousands. Now, as a second wave infects close to 1,400 people a day, the government has been forced to shut down restaurants, museums and other indoor places again in several regions.
Quebec’s total spending to mitigate the epidemic and its economic impact will total almost C$13 billion, including measures announced on Thursday, the government said.
On a positive note, the province now sees the economy contracting 6% this year instead of the 6.5% forecast in June, with higher-than-expected tax receipts helping pay for increased testing and bonuses for health staff. The economy should grow 5% in 2021, less than the 6% expected previously, the government said.
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