With the looming October election, Quebec Finance Minister Eric Girard has delivered a modest budget as the province aims to withstand ongoing trade disruptions and mounting geopolitical pressure.

In line with Girard’s promise, his eighth provincial budget with the Coalition Avenir Québec (CAQ) government offers no big-ticket items or bells and whistles typically associated with a pre-electoral budget.

With the conservative spending, this year’s projected deficit is lower than expected, standing at $9.9 billion (or 1.5 per cent of GDP), including payments to the Generations Fund. That’s down from an expected $12.4 billion projected late last year.

For the 2026-27 fiscal year, the projected deficit of the $170.8-billion budget is $8.6 billion.

“The economic foundations of Quebec are solid,” Girard said, emphasizing that the province is faring better financially than the rest of Canada. 

However, many of the intended expenses outlined in the 2026-27 budget are based on the assumption that the average U.S. tariff rate will remain relatively stable in the coming years and that current tariffs will become permanent.

WATCH | Quebec’s deficit is expected to shrink:

Quebec projects shrinking deficit in ‘responsible, targeted’ final budget before election

Quebec’s Finance Minister Eric Girard has tabled his eighth budget six months before the next provincial election. The budget projects a $8.6B deficit for 2026-27 and the government says the deficit for 2025-26 is now at $9.9B instead of the $13.6B projected last year. The newly presented budget focuses on ‘priority issues’ for Quebecers, including investments in homelessness, combatting conjugal violence as well as housing, and it includes funds set aside for a potential future CAQ government.

Moreover, the budget factors in the recent rise in oil prices while assuming that the situation will be temporary and will ease in the coming months.

The provincial election in October and the ongoing CAQ leadership race following Premier François Legault’s resignation might also limit the long-term applicability of the fiscal plans outlined — challenges Girard acknowledged.

“Every budget is a major headache,” Girard told reporters in Quebec City. “This one had additional complexities in terms of timing and the leadership race. But I’m very proud of what we’re doing.”

Having a “plan beats no plan,” he added.

Pascal Paradis, Parti Québécois (PQ) MNA for Jean-Talon, mocked the budget, saying its lifespan will last three weeks.

“What we want is the budget plan of the future premier — and that is not what we are getting today,” Paradis said.

He also criticized the budget for lacking promises to reduce the price of gas for Quebecers.

The PQ has been demanding a reduction in the gasoline tax for over a year — well before the conflict in the Middle East — to correct the “inequity” between gas prices paid in Quebec and those paid elsewhere in Canada since the elimination of the carbon tax by Prime Minister Mark Carney, he said.

Investments to infrastructure

The budget, entitled “A Responsible Budget With Targeted Measures for Quebecers,” includes money to tackle key social emergencies, including homelessness, intimate partner violence and food insecurity.

The 2026-27 budget also maintains existing funding for schools’ cultural outings as well as  millions to support small- and medium-sized businesses in all regions. 

Quebec intends to increase infrastructure investments by more than $2 billion over the next six years in priority sectors, including health care, education, public transit and the road network. 

Most of the amounts invested will go toward maintaining existing infrastructure — a large portion of which was created between the 60s and 70s — representing 71 per cent of the sums.

About $2.3 billion will go toward major hospital construction and expansions, namely to address urgent needs and preparatory work at institutions such as the Douglas Mental Health University Institution and the Maisonneuve-Rosemont Hospital in Montreal and the Sainte-Croix Hospital in Drummondville, Que. 

However, the budget did not detail the exact amounts that would be allotted for specific institutions nor if any of the investments would be seen this year. 

Economic forecasts

Quebec’s economy was weakened by the United States tightening protectionist policies given that the province’s economy is heavily dependent on trade with the U.S., according to the budget. 

While the province’s economy in 2025 slowed (0.8 per cent growth), Girard said there is still reason to remain optimistic. 

It appears that Quebec remains on track to pay off its deficit by 2029-30 “at the latest” as planned, according to the budget.

Additionally, the province’s GDP growth is expected to reach 1.1 per cent in 2026 and 1.4 per cent in 2027, presuming that the effective tariff rates stay relatively stable over the next few years. 

Girard says the greatest uncertainty looming over the province is the renewal of the Canada-United States-Mexico Agreement (CUSMA), which the Trump administration has threatened to terminate. 

The finance minister presented two economic forecast scenarios estimating the impact on the province’s GDP, one of which forecasts a recession if the trade dispute with the U.S. escalates. 

In that case, Girard projects a 0.2 per cent decline of Quebec’s economic activities in 2026 before growing by 0.8 per cent in 2027 and two per cent in 2028.

However, if the trade dispute is resolved, the second scenario forecasts that Quebec’s GDP would increase by 1.6 per cent in 2026, followed by two per cent in 2027 and 1.8 per cent in 2028. 

Sums set aside for the CAQ’s next leader

Girard said that the budget sets aside $250 million per year over the next five years for the CAQ’s next leader to use for electoral promises.

Leading up to the budget, Girard said he had reviewed the province’s fiscal plan “line by line” with leadership candidates Fréchette and Drainville.

On April 12, the next CAQ leader will also become the next Quebec premier following Legault’s resignation. 

Liberal Leader Charles Milliard said Wednesday he was concerned about the amount set aside for the next CAQ leader in this budget and called for caution.

He also warned that either candidate “won’t have any problems spending” the money. 

“The finances of Quebec are tight,” Milliard said, noting that the successor to Legault should be using the funds to help disadvantaged populations, such as people experiencing homelessness.

Québec Solidaire co-spokesperson Ruba Ghazal dismissed the budget, calling it “irresponsible” and an “electoral brochure.” 

“This budget is [based] not on the priorities of the people, but on the priorities of the CAQ,” Ghazal said.