Quebec, however, is still far from a haircut, notes the Minister of Finance, Eric Girard.
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Liberal MP Frédéric Beauchemin brandished the “warnings” from Moody's and Morningstar DBRS on Thursday, emphasizing that Quebec still has no plan to return to balanced budgets. (Archive photo)
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The Quebec Liberal Party (PLQ) is concerned about the borrowing costs of the Quebec government, while two rating agencies judge that the deficit of 11 billion dollars planned in Tuesday's budget constitutes an element negative for the province's credit.
These warnings were issued Wednesday by Moody's and Morningstar DBRS in the form of press releases to investors . Both observe that Quebec's budgetary situation has worsened.
DBRS, for example, notes that although the budget continues to emphasize fiscal discipline and long-term debt reduction, the fiscal outlook has clearly deteriorated.
This situation, she continues, stems from a stagnant economy, larger than expected salary increases in the public sector and lower revenues from Hydro -Quebec.
In the medium term, this gloomy outlook will reduce flexibility within the current credit rating, continues DBRS, noting, however, that the province's large and diversified economy, as well as its history of robust fiscal management, should provide stability to its credit profile.
Quebec Budget 2024
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According to La Presse, the Moody's rating indicates that the most Recent budgetary results also constitute a negative credit element (credit negative, in English) which highlights the pressures that the Quebec government is facing on both revenues and expenditures.
It was no less necessary for the spokesperson for the official opposition on finance, Frédéric Beauchemin, to question the credibility of the Minister of Finance, Eric Girard, believing that the latter had notably misled in its economic and budgetary forecasts.
According to him, such alarm signals should be worrying for the Coalition Avenir Québec government (CAQ).
It's important that the CAQ pulls itself together, declared the Liberal MP for Marguerite-Bourgeoys, Thursday morning, at a press briefing. It is for all Quebecers, today, [that] it will cost more to borrow.
In the bond market, everything comes together […], so everyone will have to pay more to borrow from the bank.
A quote from Frédéric Beauchemin, Liberal finance spokesperson
Stung, the main interested party replied that he He didn't need Moody's or DBRS to know that a deficit of 11 billion was not positive from the point of view of Quebec's credit.
In the press scrum, Minister Girard, however, insisted on the fact that Quebec was still far from a reduction. According to him, the press releases sent to investors on Wednesday constitute rather a preliminary opinion, which is part of a normal process of evaluating the government's budgetary policies.
[The agencies] say that a deficit of 11 billion is a negative element for Quebec's credit; [they] do not say [that they are negative] on Quebec's credit rating, he qualified.
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The Minister of Finance of Quebec, Eric Girard, underlined at a press briefing Thursday that the findings of Moody's and Morningstar DBRS were part of a “normal process” and that if these two agencies noted the importance of the deficit forecast by Quebec for the 2024-2025 financial year, they also noted certain “positive” aspects of the budget presented Tuesday.
Like the minister, the Parti Québécois (PQ) also put the warnings from Moody's and DBRS into perspective, believing that if the government's budgetary posture could be described as complicated or difficult, it was not ;was not as catastrophic as that of the federal government.
We must be careful, argued MP Pascal Paradis. We must not entertain this vision, that Quebec is in a risky situation.
When we look at the ratio [of] the deficit in relation to GDP, Quebec is still in a situation which places it quite advantageously compared to all kinds of Western countries, particularly in Europe, argued Mr. Paradis.
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The PQ MP, Pascal Bérubé, refuses to say whether he is worried about the warning issued by Moody's and DBPR, but he believes that the CAQ puts Quebec in a “more difficult position” because of the “choices” it makes. made in terms of finances.
Tabled Tuesday, the 2024-2025 budget of the Legault government forecasts a deficit of $11 billion for the The coming year, a shortfall equivalent to 1.9% of the Quebec economy.
At a press briefing on Wednesday, the Prime Minister wanted to put everything into perspective, specifying that, without payment to the Generations Fund, the shortfall for the #x27;year coming year would rather be $8.8 billion, or 1.5% of GDP.
However, five other Liberal budgets and PQ members tabled in the 1980s and 1990s predicted, relatively speaking, even larger deficits, he stressed.
