Coronavirus: Quebec finance minister says province will have $15B deficit

Coronavirus: Quebec expects near-$15 billion deficit due to the pandemic
Quebec finance minister Eric Girard said on Friday that Quebec is expected to see -6.5 per cent in real GDP this year and a deficit of nearly $15 billion due to stopping 40 per cent of the province’s economy for 8 weeks amid the pandemic.

During a press conference on Friday morning, Quebec said it’s projecting a $15-billion deficit for the current fiscal year, three months after Finance Minister Eric Girard forecast a surplus of nearly $3 billion.

Girard’s economic update also plans for a second wave of COVID-19, setting aside $4 billion to manage the fallout.

“What is taken into account (are the) sectors (that) have been affected by the first wave and will be affected long-term, (such as) tourism, air transportation, retail,” said Girard. “(We’re) not taking into account the second wave (in our projection), but we are thinking of it.”

Before the pandemic, Girard had estimated in early March that the fiscal year would end with a $2.7-billion surplus, but he now says Quebec is looking at a $14.9-billion hole in its 2020-21 budget.

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The update says the COVID-19 crisis forced the province to inject $3.7 billion in the health sector, as well as $1 billion to help workers and another $2 billion for companies.

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COVID-19: Quebec reveals $15 billion deficit
COVID-19: Quebec reveals $15 billion deficit

Since March, provincial revenues fell by $8.5 billion.

“Inflation is close to one per cent this year, and (it will be) next year. We’re in a period close to recession, with very low inflation,” Girard said.

The finance minister expects the province’s GDP to shrink this year by 6.5 per cent when just three months ago, he predicted it would grow by two per cent.

According to Girard, confinement measures led to the shutdown of nearly 40 per cent of the province’s economy for eight weeks.

“Eight thousand jobs and 17 per cent unemployement rate in April. Unemployement should continue improving, but not all jobs will be coming back,” he said.

On Thursday, the official Opposition said it wants to see more help for small and medium-sized businesses.

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The Liberals have criticized the government, saying it hasn’t done enough to support local businesses, and members hope to see more funds to help merchants.

“We’re saying right now that we need to have a plan to save all the small and medium-sized companies,” said Liberal Leader Dominique Anglade on Thursday.

“They cannot just tell us that everything that they’ve done has worked so far. We see that companies are going bankrupt every day. Every day, there are companies that are saying: ‘We cannot go through this phase.'”

— With files from Global News’ Raquel Fletcher and The Canadian Press

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