Quebec: Budget 2026–27 Preview

Highlights

• Finance Minister Eric Girard will table the 2026–27 budget this Wednesday. This is the last budget before the provincial election scheduled for October. In the 2025 Update on Quebec’s Economic and Financial Situation, released in November, the deficit forecast for the current fiscal year (FY26) was $12.4B, and the deficit for FY27 was projected at $9.5B.¹
• From last spring up until September 2025, quarterly reports on Quebec’s financial situation showed revenues and expenditures that were in line with their expected trajectories. Since then, however, the economy has slowed. Still, the contingency reserve should be enough to absorb any revenue shortfall, and fiscal targets should remain within reach for FY26.
• The loss of momentum we’ve seen in recent months may have a greater impact on the province’s ability to keep the deficit at the $9.5B projected for FY27. The labour force is stalling, and prolonged geopolitical uncertainty (the ongoing trade war and the escalating conflict in the Middle East, which will undermine purchasing power) could dampen wage growth and household spending. These factors collectively pose downside risks to the forecasted 3.9% growth in own-source revenue for FY27.
• On the expenditure side, the government’s projections already appeared ambitious given the challenges observed in the health and education systems, on top of the wage commitments already agreed to in those sectors for the coming years. And as for any new commitments, Minister Eric Girard has stated this budget will be “sober,” with no electoral promises. This restraint has already manifested in Quebec’s approach to some of the federal support measures introduced in 2025, which the province chose not to enhance, unlike Ontario. This includes the elimination of GST on new housing for first-time buyers and the decision to keep carbon pricing for individuals. Quebec’s credit rating was also downgraded last year.
• Beyond these challenges, the province still needs to find another $2.5B to return to a balanced budget by 2029–30 and comply with the provisions of the Balanced Budget Act. In other words, Quebec will be walking a fiscal tightrope, with pressures mounting on both revenues and expenditures. All the same, the province’s debt ratios will get a boost from the recent revisions to provincial GDP figures, which could make it easier to reach its target net debt-to-GDP ratio of 35.5% by 2032–33, even if some government assumptions were to prove overly optimistic.

¹ Unless otherwise indicated, this document refers to the budgetary balance after deposits in the Generations Fund.