Exhibit 99.5

PRE-ELECTION

REPORT

ON THE STATE OF

QUÉBEC'S PUBLIC FINANCES

AUGUST 2026

MESSAGE FROM THE MINISTER OF FINANCE

Nathalie Roy
President of the National Assembly
Hôtel du Parlement 
1045, rue des Parlementaires
Québec (Québec)  G1A 1A3

Madam President,

It is my honour to send you the Pre-election Report on the State of Québec's Public Finances - August 2026, in accordance with the Act respecting the Ministère des Finances.

As required by this Act, the Auditor General of Québec is supporting this publication with an assurance report on the plausibility of the economic and budgetary outlook included herein.

The publication of the pre-election report demonstrates the Québec government's commitment to report with transparency on the state of Québec's public finances in the run-up to the general election. This commitment is a cornerstone of the management of Québec's public finances.

The Pre-election Report on the State of Québec's Public Finances - August 2026 is based on the financial framework of the Québec Budget Plan - March 2026, to which the necessary adjustments were made in accordance with the most recent economic and budgetary information available.

The financial framework of this report is based on a prudent economic scenario, as trade tensions with the United States remain high and the international geopolitical landscape continues to be marked by numerous uncertainties, particularly in the Middle East.

— To account for risks, the financial framework includes provisions totalling $9.0 billion over the forecast horizon. These provisions are intended to preserve the leeway needed to cope with unforeseen expenditures or to mitigate the effects of more-moderate-than-anticipated economic growth.

❏ The economic and budgetary situation

The financial framework presented in this report is based on economic assumptions that take into account the most recent economic and fiscal outlook.

The Ministère des Finances forecasts real GDP growth of 0.7% in 2026 and 1.4% in 2027, which is in line with private sector forecasts. Revenue amounts to $168.4 billion in 2026-2027, up 5%, while expenditures stand at $171.6 billion, an increase of 3.4%.

— Over the period covered by the financial framework, revenue is expected to grow at an average annual rate of 3.3%, while expenditures will increase by 2.3%, a trend consistent with the gradual return to a balanced budget.

Annual infrastructure investments have reached historic levels. These substantial investments place added pressure on the financial framework and debt. However, continued significant investments remain necessary to maintain public infrastructure.

— Indeed, 71% of the investments planned under the 2026-2036 Québec Infrastructure Plan will be used to maintain infrastructure.

Despite an uncertain economic environment, the financial framework presented in this report is a testament to the resilience of the Québec economy and the strength of its public finances.

❏ A credible plan to restore fiscal balance

As was the case for 2024-2025, when the deficit within the meaning of the Balanced Budget Act was $2.9 billion lower than the March 2025 forecasts, Québec's budgetary situation improved significantly in 2025-2026. Indeed, the deficit forecast within the meaning of the Balanced Budget Act fell from $13.6 billion in Budget 2025-2026 to $9.9 billion in Budget 2026-2027, and then to $7.8 billion according to the Public Accounts 2025-2026. These favourable results for these two years were achieved, in particular, through the non-utilization of the contingency reserve. 

— Among the 2025-2026 results projected or published in Canada, only one province has an accounting deficit as a proportion of its GDP that is lower than Québec's.

For 2026-2027 to 2028-2029, the financial framework also presents improvements in the budgetary situation, which will reduce the forecast deficit by $922 million in 2026-2027, eliminate the $750-million gap to be bridged in 2027-2028 and reduce the gap to be bridged for 2028-2029 by $400 million.

This trend confirms the soundness of our efforts to ensure a gradual return to a balanced budget, after deposits of dedicated revenues in the Generations Fund, which is used solely to repay debt. This means that, upon the return to a balanced budget, which is expected to be achieved in 2029-2030, the government will present an accounting surplus.

Québec has a formal and credible legislative framework to ensure the return to a balanced budget and reduction of the debt. Modernized by our government, the Balanced Budget Act and the Act to reduce the debt and establish the Generations Fund set out the principles that guide the responsible management of public finances.

The government remains committed to consolidating public finances through a plan to restore fiscal balance. The plan presented is credible and is based on specific measures addressing both revenue and expenditures.

— Rating agencies recognized the credibility of the plan to restore fiscal balance and the improvements to the financial framework after the publication of Budget 2026-2027. Adhering to the plan is essential to maintaining Québec's credit rating.

❏ Change in debt

Reducing the debt burden is a core objective of the management of Québec's public finances. It helps preserve the leeway needed to ensure funding for public services and public infrastructure and to address the priorities of Quebecers.

The government forecasts that the net debt will continue its downward trajectory until it reaches the targets set out in the Act to reduce the debt and establish the Generations Fund, namely, 35.5% of GDP in 2032-2033 and 32.5% of GDP in 2037-2038.

— As at March 31, 2026, Québec's net debt represented 38.1% of GDP, a decrease of 4.8 percentage points from the level of 42.9% observed as at March 31, 2019.

— Since 2016-2017, Québec's net debt as a percentage of GDP has fallen by 10.8 percentage points. Only New Brunswick saw a more significant decline.

This reduction in indebtedness was achieved despite the significant economic upheaval of recent years. Québec has demonstrated great resilience in the face of a series of major shocks, including the COVID-19 pandemic, the impact on the global economy of Russia's invasion of Ukraine, the surge in inflation and the rapid rise in interest rates in 2022, as well as the droughts and low runoff experienced in recent years.

More recently, trade tensions with the United States have further increased economic uncertainty. Added to these is a still-unstable geopolitical situation due, in particular, to the war in the Middle East.

Québec nevertheless benefits from a diversified economy, strong public institutions and well-regarded fiscal governance. By relying on responsible and prudent management of public finances, it boasts the necessary means to sustain its prosperity, continue the gradual return to a balanced budget, and meet the aspirations of current and future generations.

Serving Quebecers as Minister of Finance for the past eight years has been an honour and a true privilege. Every era has its challenges. I am particularly proud to note that, despite the significant turbulence we have seen, Québec has narrowed its wealth gap with Ontario and the rest of Canada by 5 percentage points while reducing its debt relative to the economy by 5 percentage points.

Québec's public finances are based on two legislative pillars: the Balanced Budget Act and the Act to reduce the debt and establish the Generations Fund. As the election campaign approaches, these two pillars must guide all parties aspiring to lead Québec.

Sincerely,

Eric Girard
Minister of Finance
Québec, August 2026

STATEMENT CONCERNING THE RESPONSIBILITY OF THE MINISTÈRE DES FINANCES

The Pre-election Report on the State of Québec's Public Finances - August 2026 was prepared by the Ministère des Finances pursuant to the Act respecting the Ministère des Finances. The financial framework in the report is based on the data published in the Québec Budget Plan - March 2026 and takes into account the most recent financial data available.¹

The Ministère des Finances is responsible for the information in the report. As required under the law, the report includes:

— the economic forecasts and assumptions;

— the projected components of the government's financial framework;

— the expenditure forecasts prepared in collaboration with the Secrétariat du Conseil du trésor, broken down by field of State activity;

— the reports required under section 9 of the Balanced Budget Act and section 11 of the Act to reduce the debt and establish the Generations Fund.

The economic forecasts are based on the assumption that trade relations between Canada and the United States will shift toward a new equilibrium, marked by persistent tariff measures, and anticipate the gradual resumption, beginning in summer 2026, of oil flows through the Strait of Hormuz. The economic forecasts for Québec take into account a number of external and internal factors, such as:

— the economic situation of Québec's main trading partners;

— monetary policies and financial markets;

— Québec's domestic demand;

— the labour market.

As for the revenue and expenditure forecasts, they are based on assumptions pertaining to the evolution of the Québec economy that take into account, in particular, the external and internal factors mentioned above, as well as assumptions regarding the change in federal transfers and the cost of the basket of government services.

The economic forecasts as well as revenue and expenditure forecasts include initiatives that are to be implemented by the government.

The financial impacts of the new accounting standard, which replaces the net debt indicator with net financial liabilities and came into force on April 1, 2026, have been included in the forecasts of the Québec government's debt over the budget horizon. As for the financial impacts of the new accounting standard concerning employee future benefits, slated to come into force on April 1, 2029, while analyses have been carried out, certain elements remain to be finalized. Accordingly, no impacts have been incorporated in the government's expenditure and debt forecasts.²

The budgetary balance and debt data are established based on the definitions in the Balanced Budget Act and the Act to reduce the debt and establish the Generations Fund.³

The forecasts presented in this report are underpinned by reasonable, plausible assumptions that reflect best practices, particularly those recommended by international organizations such as the Organisation for Economic Co-operation and Development (OECD).

The pre-election report, provided for in the Act respecting the Ministère des Finances, is in addition to the initiatives taken by the Ministère des Finances to publish transparent, reliable, and timely information, such as the early release of the Public Accounts 2025-2026⁴ in July 2026, thereby creating an environment conducive to decision-making that supports the sustainability of public finances.

Lastly, I wish to acknowledge that this report would not have been possible without the dedication, diligence and superb work of the extended Ministère des Finances team.

Christyne Tremblay

Deputy Minister of Finance

August 2026

ASSURANCE REPORT OF THE AUDITOR GENERAL OF QUÉBEC ON THE 2026 PRE-ELECTION REPORT

To the National Assembly,

I have conducted an assurance review engagement on the plausibility of the assumptions and forecasts presented in the attached pre-election report, prepared by the Minister of Finance. My work involved examining, in all material aspects, the assumptions made and the forecasts related to the financial framework and debt for the following three fiscal years: 2026-2027, 2027-2028 and
2028-2029. The data for the 2025-2026 fiscal year presented in the pre-election report correspond to those in the consolidated financial statements of the Gouvernement du Québec which I audited.

As the forecasts are based on assumptions about future events, the actual results will differ from the information presented in the pre-election report, and the differences could be significant. Thus, I do not express any conclusion as to the likelihood that the forecasts will materialize.

In accordance with the Auditor General Act, I report that I have received all the information and documents requested to arrive at my conclusion.

Conclusion of the Auditor General's review 

On the basis of the procedures implemented and the evidence obtained, the assumptions and forecasts related to the financial framework and debt for the 2026-2027, 2027-2028 and 2028-2029 fiscal years are, as of July 10, 2026, plausible in all material respects according to the objective and the criteria established by the Auditor General. It should be noted that there are nonetheless challenges, which are set out in the Auditor General's comments below. 

Observations - Presentation of the surplus (deficit) in the financial framework

I draw your attention to the boxed text in section 3.1 of the pre-election report, which notes that the accounting surplus (deficit) presented in the pre-election report's financial framework does not correspond to what will be presented in the government's consolidated financial statements according to applicable public sector accounting standards. It is specified that this difference arises from the fact that in the financial framework, the surplus (deficit) was calculated prior to giving due consideration to the gap to be bridged of $1.85 billion in 2028-2029. As such, the financial framework indicates a deficit of $724 million for 2028-2029, while the government's consolidated financial statements shall mention a surplus of $1.1 billion, and this, if the budgetary balance presents, as anticipated, a deficit of $1.5 billion in 2028-2029.

Auditor General's comments

Without detracting from my conclusion with regard to the plausibility of the forecasts, I would like to make the following comments.

Uncertainty as regards the economic situation

The economic situation remains uncertain due to various issues, among them geopolitical and trade tensions. As a result, projected revenue, despite being based on plausible assumptions, remains subject to fluctuations. 

Plausibility of the financial framework

Given the anticipated decrease in the growth of portfolio expenditures, carrying out the plan to restore fiscal balance will notably call for reducing or eliminating the funding of certain activities and programs. There is a risk that these budgetary efforts could, among other things, impact the services provided to the population, especially in 2028-2029. I believe these efforts will represent at least $2 billion in 2027-2028 and $3 billion in 2028-2029. There is also a gap to be bridged of $1.85 billion in 2028-2029 which may need to be addressed through additional measures, unless the gap is eradicated with additional revenue or the contingency reserve is not used. The elements, which nonetheless allow to conclude that the portfolio expenditure forecasts are plausible, are laid out in our report entitled The Auditor General of Québec's detailed analysis of the Pre-Election report 2026, which will be available on the Auditor General's website.

Reports from the Ministère on the application of the Balanced Budget Act and the Act to reduce the debt and establish the Generations Fund

I do not put forth any conclusion with regard to the last two years of the financial framework presented in the pre-election report. I do, however, want to point out the major challenges associated with the budgetary efforts required in 2029-2030 and 2030-2031 to achieve the objectives of the Balanced Budget Act, particularly in light of their cumulative effect and the need to ensure their long-term viability. Furthermore, the debt reduction trajectory as a percentage of GDP until 2037-2038 requires achieving and maintaining a balanced budget in addition to reducing the amounts earmarked for capital investments, all while the condition of Québec infrastructure is deteriorating and several projects are planned.

The Auditor General of Québec's detailed analysis of the Pre-Election report

In addition to this assurance report, I prepared a report entitled The Auditor General of Québec's detailed analysis of the 2026 Pre-Election report, in which I explain my work and the grounds on which I based my conclusion. It also includes additional information necessary to allow pre-election report users to fully assess the assumptions and forecasts associated with the financial framework and debt. This analysis will be available on the Auditor General's website.

This analysis also contains various comments on the presentation of information in the pre-election report, as well as the objective and criteria used to assess the presentation of the information in question. I notably comment on the presentation of the surplus (deficit) in the financial framework referred to in the Observations - Presentation of the surplus (deficit) section in the financial framework above.

Responsibility of the Ministère des Finances

Under the Act respecting the Ministère des Finances, the Minister must prepare and publish, prior to the general election that follows the expiry of a Legislature, a pre-election report on the state of Québec's public finances. This responsibility includes making assumptions and forecasts that are deemed plausible. 

Responsibility of the Auditor General

My responsibility is to review the plausibility of the assumptions and forecasts presented in the pre-election report, as of July 10, 2026, based on the procedures I have implemented and the evidence I have obtained with regard to the objective and criteria I have deemed suitable. This objective and these criteria are provided below. I must also indicate whether I received all the information and documents requested. I conducted the engagement in accordance with the Canadian Standards on Assurance Engagements 3001, Direct Engagements. This standard requires that I plan and carry out the engagement so as to obtain assurance that is meaningful in light of the circumstances. 

Because of the review engagement's purpose, which focuses on forecasts, the nature of the procedures implemented is different than what is done during audit engagements, and the level of assurance obtained is thus lower.

The procedures implemented rely on my professional judgement. These include, to the extent deemed appropriate, an analysis of the budget process, requests for information, cross-referencing of documents or reconciliation with supporting documents, analytical procedures, assessment of the estimation methods used and the Ministère des Finance's economic forecasting models, review of sensitivity calculations and analyses. Finally, the consultation of public finance specialists and economists, including econometric analysts, form an integral part of the procedures.

The Auditor General's independence and quality management

I have complied with the relevant ethical requirements and code of ethics applicable to the practice of public accounting and related to assurance engagements, published by various professional accounting bodies and which are based on the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

The Auditor General applies the Canadian Standard on Quality Management 1, Quality Management for Firms that Perform Audits and Reviews of Financial Statements, or Other Assurance or Related Services Engagements. This standard requires that the Auditor General introduce and maintain a quality management system that includes policies and procedures on compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

The Auditor General of Québec

Christine Roy, FCPA Auditor

Québec, August 10, 2026

PRE-ELECTION REPORT ON THE STATE OF QUÉBEC'S
PUBLIC FINANCES

 11

HIGHLIGHTS

Québec's economic and financial situation is based on a balanced baseline scenario that takes into account, among other things, recent developments in the economic situation of Québec's main trading partners, monetary policies, financial markets and oil prices.

❏ Québec's economy

In its baseline economic scenario, the Ministère des Finances assumes that trade relations between Canada and the United States will evolve toward a new equilibrium, marked by persistent tariff measures. The pre-election report is based on the premise that the tariffs are expected to remain in place for the long term. However, the initial shock caused by the introduction of the tariffs will gradually fade. Furthermore, progress in the Canada-United States-Mexico Agreement (CUSMA) negotiations is expected to help reduce the uncertainty that has shaken consumer and business confidence. This trend will allow for a return to more sustained economic growth starting in 2027.

— The baseline scenario also assumes a gradual normalization, beginning in summer 2026, of oil flows through the Strait of Hormuz, a vital waterway through which approximately 20% of the world's crude oil passes.

Following a 1.7% increase in 2024, Québec's economic growth slowed in 2025 to 0.6%. Despite this moderation, a closer look at the statistics paints a more positive picture. In particular, domestic demand remained strong in 2025 and grew by 1.9%, contributing 2.0 percentage points to economic growth.

Real GDP will continue to grow despite the risks inherent to the forecast scenario. In particular, uncertainty surrounding the trade dispute with the United States will remain high. The geopolitical situation also remains tense, particularly in the Middle East. In addition, growth will be limited by the demographic outlook.

— The Ministère des Finances forecasts an increase in economic activity of 0.7% in 2026 and 1.4% in 2027. This is in line with average private sector forecasts (+0.5% in 2026 and +1.6% in 2027).⁵

— From 2028 to 2030, average annual increase is expected to stand at 1.4%.

In this uncertain environment, the Ministère des Finances is presenting two alternative economic forecast scenarios in the 2026 pre-election report to estimate the impact of a recession or stronger-than-forecast economic growth on the financial framework and on the Québec government's debt.

❏ Québec's financial situation

The financial framework presented takes into account risks related to the economic situation.
It includes predictable funding for the government's missions and the financial impact of government decisions made since the release of Budget 2026-2027, particularly the initiatives announced to help cope with the rising cost of living.

The financial framework of the Pre-election Report on the State of Québec's Public Finances - August 2026 remains in compliance with the Balanced Budget Act, as the projected deficits are lower than or equal to those in the plan to restore fiscal balance tabled as part of Budget 2025-2026, and provides for increasing deposits in the Generations Fund over the forecast horizon.

— Efforts to return to a balanced budget are continuing in order to preserve the long-term sustainability of public finances.

Furthermore, greater-than-expected revenue since the release of Budget 2026-2027 has made it possible to present results that are more favourable than anticipated in March 2026. The government remains committed to consolidating public finances.

— The accounting deficit stands at $5.5 billion in 2025-2026, or 0.9% of GDP.

— This represents an improvement of $2.2 billion since the publication of Budget 2026-2027.

— In 2026-2027, the forecast accounting deficit is $5.2 billion (0.8% of GDP), an improvement of $1.1 billion compared to that forecast in Budget 2026-2027.

— This forecast includes a contingency reserve of $2.0 billion.

Starting in 2027-2028, the balances within the meaning of the Balanced Budget Act forecast in Budget 2026-2027 remain unchanged, but include the elimination of the $750-million gap to be bridged in 2027-2028 and a $400-million reduction in the gap to be bridged for 2028-2029.

The financial framework still includes gaps to be bridged of $1.9 billion in 2028-2029 and $2.0 billion in 2029-2030, which will need to be eliminated in order to achieve a balanced budget after deposits of dedicated revenues in the Generations Fund.

— Furthermore, a return to more favourable economic conditions, for example, if the United States were to remove tariffs on imports as part of CUSMA renewal negotiations, would further stimulate economic activity and allow the gaps to be fully bridged.⁶

Since the government's available levers for eliminating the gaps have not been determined, the government has chosen, starting with Budget 2025-2026, to report an accounting surplus (deficit) before the gap to be bridged.

To ensure the comparability of budget documents, this presentation of the balance has been retained in the financial framework of the Pre-election Report on the State of Québec's Public Finances - August 2026.

However, in accordance with the presentation requirements of the public sector accounting standards applied in preparing the public accounts, an illustration of the accounting balance, as it will be presented in the financial statements, is available in Section 3.1.

Given the uncertain economic environment, the government is maintaining an $8.0-billion contingency reserve over the period covered by the financial framework, including $2.0 billion
in 2026-2027. This reserve could be used, in particular, to cover unforeseen expenditures or mitigate the effects of more-moderate-than-expected economic growth.

— The $2.0 billion contingency reserve that was provided for 2025-2026 was not used, as was also the case in 2024-2025.

❏ The Québec government's debt

The Act to reduce the debt and establish the Generations Fund stipulates that, for fiscal years 2032-2033 and 2037-2038, the net debt presented in the government's financial statements may not exceed 38.0% and 35.0% of GDP, respectively. These ratios correspond to the maximum limit of the respective targets of 35.5% and 32.5% of GDP, as reviewed by the government in the March 2025 budget speech.

The net debt burden stood at 38.1% of GDP as at March 31, 2026. It is projected to decline to 36.0% of GDP as at March 31, 2031.

A gradual reduction of the debt burden will make it possible to ensure the long-term financing of the government's main missions as well as a prosperous tomorrow for future generations.

❏ Québec's economic outlook

TABLE 1

Sources: Institut de la statistique du Québec, Statistics Canada, Canada Mortgage and Housing Corporation and Ministère des Finances du Québec.

❏ Financial framework

TABLE 2

Note: Totals may not add due to rounding.

(1) Average annual growth rate, corresponding to the geometric mean over five years, from 2026-2027 to 2030-2031.

(2) Growth in 2028-2029 and 2029-2030 is affected by the impact of the stabilization of investments for infrastructure belonging to third parties and initiatives stemming from the expenditure review. Excluding these elements, growth would be 2.2% and 2.0%, respectively.

(3) The accounting surplus (deficit) before the gap to be bridged corresponds to the accounting surplus (deficit) presented in the budget documents. In accordance with the presentation requirements of the public sector accounting standards applied in preparing the public accounts, an illustration of the accounting surplus (deficit) once the gaps have been bridged is provided in Section 3.1. For example, in 2028-2029, once the gap has been bridged, the accounting surplus will amount to $1 126 million. 

1. ECONOMIC AND FINANCIAL FORECASTS

1.1 Changes in Québec's situation

Following a 1.7% increase in 2024, Québec's economic growth slowed in 2025 to 0.6%.

— Despite this moderation, a closer look at the statistics paints a more positive picture. In particular, domestic demand remained strong in 2025 and grew by 1.9%, contributing 2.0 percentage points to economic growth. This change was driven in particular by strong household consumption expenditure (+1.8%) and residential investment (+6.6%).

— In Canada, following a 2.0% increase in 2024, real GDP grew by 1.9% in 2025. This increase is stronger than that observed in Québec in 2025 (+0.6%).

— The shock linked to the trade dispute with the United States has had a greater impact on Québec than on Canada, due to the concentration of tariffs in sectors where Québec is particularly active, including aluminum and lumber.

Economic activity will continue to grow despite the risks inherent to the forecast scenario. In particular, uncertainty surrounding the trade dispute with the United States will remain high. In addition, the geopolitical situation will remain tense, particularly in the Middle East. Moreover, growth will be limited by the demographic outlook.

— Real GDP increases of 0.7% in 2026 and 1.4% in 2027 are expected.

— From 2028 to 2030, average annual increase is expected to stand at 1.4%.

CHART 1 Economic growth in Québec

(real GDP, percentage change)

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

❏ Determinants of Québec's economic growth

The increase in real GDP is based on the following elements:

— the demographic weight of the main labour pool, which represents individuals aged 15 to 64 compared to the total population;

— improvement in the employment rate, that is, the total number of people employed relative to people aged 15 to 64;

— productivity growth, that is, the change in output per job.

Québec has an aging population. This phenomenon is due, in particular, to the post-war baby boom, the rising life expectancy and the decline in births. In addition, the population will decline from 2026 to 2029, due to federal and provincial immigration policies, among other things. In this context, the effects of an aging population will become more pronounced.

— Accordingly, the demographic weight of the main labour pool-which has been declining since the mid-2000s-will continue to decrease in the coming years.

An increase in labour market participation is essential to support real GDP growth over the long term. However, a significant gain in the employment rate has already been seen in recent years, and the labour market is close to full employment. Further increases are still possible in this area, but they will be more limited.

Against the backdrop of an aging population and a tight labour market, immigration and productivity gains offer the greatest potential for improvement to support Québec's economic growth in the coming years.

TABLE 3

Note: Totals may not add due to rounding.

(1) The demographic weight of 15- to 64-year-olds represents the share of the population aged 15 to 64 as a percentage of the total population.

(2) The employment rate corresponds to the total number of workers in proportion to the population aged 15 to 64.

(3) Productivity as measured by real GDP per job.

(4) Standard of living as measured by real GDP per capita.

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec. 

■ Despite demographic challenges, growth in living standards has continued to rise

The demographic challenges that Québec has been facing for the past several years represent a challenge for the economy, particularly due to their impacts on the main labour pool.

Nevertheless, Québec has stood out by posting steady growth in real GDP per capita (+4.8% between 2018 and 2025).

— This performance exceeded that of Ontario (+0.3%) and the rest of Canada (+0.2%) for the same period.

CHART 2 Real GDP per capita between 2018 and 2025

(percentage change over the entire period)

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

■ Recent demographic changes

■ A declining population

Québec registered record population growth in 2023 (+1.8%) and 2024 (+2.0%), fuelled by immigration policies. A similar trend was observed across Canada, where the population also grew significantly in 2023 (+2.8%) and 2024 (+3.0%).

— For these two years, the net increase in the number of non-permanent residents in Québec (+238 775 people from 2023 to 2024) and international immigrants (+104 364 people) fully accounts for the population increase (+325 511 people).

— In contrast, natural increase-the difference between births and deaths-became negative starting in 2024. Furthermore, interprovincial migration has been showing a negative outflow since statistics began to be compiled.

Although the population continued to grow in 2025 (+0.7%), population growth slowed compared to the strong increases of 2023 (+1.8%) and 2024 (+2.0%). This change can be attributed in particular to policies aimed at reducing the number of non-permanent residents that were implemented by the federal government and the Québec government.

— After reaching a peak of 134 400 in 2024, net non-permanent resident intake in Québec declined to approximately 21 000 in 2025.

This downward trend will continue, and Québec is expected to see population decreases until 2029, including declines of 0.4% in 2026 and 0.2% in 2027.

CHART 3 Components of population growth in Québec

(annual change in population and its components, in thousands of people)

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

■ The proportion of individuals aged 65 and over in the population has reached a record high

Against this backdrop of population decline, the effects of an aging population will be more pronounced. Consequently, the proportion of individuals aged 15 to 64-defined as the potential labour pool within Québec's total population-has been declining since the mid-2000s and will continue to drop in the coming years.

— It fell from a high of 69.7% in 2007 to 63.1% in 2025, and is expected to reach a low of 61.1%
in 2030.

At the same time, the demographic weight of the population aged 65 and over is increasing steadily. It rose from 14.2% in 2007 to 21.7% in 2025, and is expected to reach a record 24.5% in 2030.

While population aging is a widespread phenomenon among its main economic partners, this trend is more pronounced in Québec.

— By way of comparison, in 2025, the demographic weight of the population aged 15 to 64 within the total population stood at 66.5% in Ontario and 65.5% in Canada (63.1% in Québec).

CHART 4 Demographic weight of certain age groups in Québec		CHART 5 Demographic weight of the population aged 15 to 64
(proportion of certain age groups in the total population, in per cent)		(proportion in the total population, in per cent)
Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.		Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

■ State of the labour market

In an uncertain economic climate marked by trade tensions and the demographic slowdown, the labour market remained resilient in 2025.

— For the year as a whole, 78 800 jobs were created (+1.7%). Meanwhile, the unemployment rate increased slightly from 5.3% in 2024 to 5.6% in 2025 in Québec. Despite this increase, it remained at a historically low level and was one of the lowest in the country in 2025 (6.8% in Canada).

— In addition, the employment rate for people aged 15 to 64 stood at 77.4% in 2025 in Québec, the highest rate among the provinces (74.2% in Canada).

Despite this strong performance in 2025, the Québec labour market has been showing signs of slowing down since the beginning of 2026.

— In the first five months of 2026, compared with the same period in 2025, there were 19 600 jobs lost (−0.4%).

— In addition, after peaking in September 2021 (258 520 positions), the number of job vacancies declined to 112 400 in April 2026. Meanwhile, the unemployment rate averages 5.7% for the months available in 2026 (5.6% in 2025).

— This change resulted in a slowdown in the annual growth rate of employees' weekly earnings, which fell from 5.2% in April 2025 to 3.4% in April 2026.

Over the coming months, job creation is expected to resume, but at a modest pace. A less favourable economic environment, combined with the decline in the labour force, will lead to slower job creation.

CHART 6 Change in the unemployment rate		CHART 7 Change in job vacancies in Québec
(average annual data in per cent)		(in thousands of jobs)
(1) Average for the months available in 2026. Source: Statistics Canada.		Notes: Data on job vacancies begin in April 2015. Data for the second and third quarters of 2020 are unavailable, as some of Statistics Canada's activities were temporarily suspended during the COVID-19 pandemic. Source: Statistics Canada.

❏ Change in nominal GDP

After posting strong increases since 2021, including a 4.7% gain in 2025, nominal GDP is expected to show more moderate growth, rising by 3.4% on average annually from 2026 to 2030.

This nominal GDP growth will stem from the combined impact of the increase in real economic activity and the GDP deflator, which measures price changes in the overall economy.

— Real GDP growth is expected to stand at 0.7% in 2026, then 1.4% in 2027, before rising slightly to an annual average of 1.4% from 2028 to 2030-a rate of growth closer to its potential.

— Meanwhile, the GDP deflator is expected to slow, falling from 4.1% in 2025 to 2.7% in 2026, then to 2.0% in 2027 and 1.9% on average from 2028 to 2030.

— In general, over the next five years, the increase in the prices of Québec's exports will be slightly lower than the growth in import prices, due, in particular, to changes in energy prices. In fact, since Québec imports a significant portion of its energy products, high oil prices will further drive up the cost of imports. As a result, the terms of trade will not contribute to an increase in the GDP deflator.

— Moreover, the increase in the consumer price index (CPI) is expected to gradually slow, falling from 3.0% in 2026 to 2.1% in 2027, before returning to the 2.0% target from 2028 to 2030.

TABLE 4

Nominal GDP in Québec

Note: Totals may not add due to rounding.

Sources: Institut de la statistique du Québec, Statistics Canada and Ministère des Finances du Québec.

❏ Forecasts comparable to those of the private sector

The economic and financial forecasts incorporate the uncertainties and risks inherent in the particular context in which Québec is evolving. They are balanced, meaning that they incorporate both upward and downward risks.

— In 2026, the Ministère des Finances forecasts an increase in economic activity (+0.7%) that is slightly higher than that anticipated on average by private sector forecasters (+0.5%).

— In 2027, the Ministère des Finances estimates that the increase in economic activity (+1.4%) will be slightly lower than that expected on average by private sector forecasters (+1.6%).

The variation among private sector forecasts reflects the uncertainty arising from the current economic situation, with estimates ranging from 0.2% (the lowest forecast) to 0.8% (most optimistic forecast) for 2026.

CHART 8 Economic growth in Québec in 2026		CHART 9 Economic growth in Québec in 2027
(real GDP, percentage change)		(real GDP, percentage change)
Source: Ministère des Finances du Québec survey as at June 18, 2026, which includes the forecasts of 10 private sector institutions.		Source: Ministère des Finances du Québec survey as at June 18, 2026, which includes the forecasts of 10 private sector institutions.

❏ Private sector five-year economic outlook

Over a five-year horizon, that is, from 2026 to 2030:

— the expected average growth is 1.3% for real GDP, equivalent to that expected by the private sector (+1.3%);

— the average annual increase expected is 3.4% for nominal GDP, which is slightly lower than that expected by the private sector (+3.5%).

TABLE 5

Sources: Ministère des Finances du Québec and Ministère des Finances du Québec survey as at June 18, 2026, which includes the forecasts of 10 private sector institutions.

1.2 Assumptions, risks and sensitivity analysis

❏ Assumptions

The forecast scenario assumptions are based on various external factors, including changes in the economic situation of Québec's main trading partners, monetary policies, financial markets and oil prices, as well as internal factors.

The baseline economic scenario is based on the premise that the average effective tariff rate will remain relatively stable over the next few years. Note that, due to the protections provided under CUSMA, the average effective tariff rate stood at 3.6% in Canada in April 2026. In Québec, it stood at 7.7%, reflecting, in particular, the greater weight of the manufacturing sector in the Québec economy. Furthermore, progress in the CUSMA negotiations will reduce the uncertainty that has shaken consumer and business confidence. This trend will allow for a return to more sustained economic growth starting in 2027.

The baseline scenario also factors in the gradual resumption, beginning in summer 2026, of oil flows through the Strait of Hormuz, a vital waterway through which approximately 20% of the world's crude oil passes. However, the full normalization of shipments and production in the region will happen gradually over the coming quarters, due to the time required to restore production capacity at certain energy infrastructure facilities and to resolve maritime shipping bottlenecks.

■ External factors

■ The economic situation of Québec's main trading partners

Québec is an economy open to the world. In 2025, total exports accounted for 44% of Québec's nominal GDP. Consequently, growth trends in Québec, particularly in exports, are largely influenced by the economic position of its main trading partners.

• Canada

In Canada, real GDP growth is expected to reach 0.8% in 2026, 1.7% in 2027 and 1.8% per year on average from 2028 to 2030.

— In particular, in 2026, the sharp rise in oil prices in the first half of the year will boost the terms of trade and business profits, as Canada is a net exporter. However, the positive repercussions on the real economy are expected to be limited. Furthermore, economic growth will be limited by population decline.

TABLE 6

(1) Ontario's real GDP growth in 2026 and 2027 corresponds to the average forecast of eight private sector institutions as at June 18, 2026.

Sources: Institut de la statistique du Québec, Ontario Ministry of Finance, Statistics Canada, International Monetary Fund, S&P Global, LSEG Datastream, Bloomberg, Eurostat and Ministère des Finances du Québec. 

• United States

In the United States, real GDP growth is expected to go from 2.1% in 2025 to 2.2% in 2026 and 1.9% in 2027. It is expected to stabilize at 1.9%, on average, from 2028 to 2030.

In 2026, economic activity will be slowed by trade tensions and the conflict in the Middle East. These developments, which have exacerbated inflationary pressures and weighed on consumer and business confidence, are expected to weaken household purchasing power and dampen consumption.

— In fact, the energy shock led, in particular, to an increase of approximately 30% in gasoline prices between the start of the war in late February and late June.

Furthermore, the demographic slowdown, driven by an aging population and the effects of which are exacerbated by the restrictive immigration policy in effect since 2025, is also expected to limit economic activity.

However, the U.S. economy will continue to show some resilience in the face of various sources of uncertainty. In the short term, it will be supported by the sweeping 2025 budget plan, the One Big Beautiful Bill Act (OBBBA), and by substantial investments in artificial intelligence.

— For its part, productivity is expected to remain high and maintain growth in economic activity close to its potential over the medium term.

Budget issues will, however, limit the federal government's leeway. In April 2026, the International Monetary Fund reported that the budgetary deficit could go from 6.8% of GDP in 2025
to 7.5% of GDP in 2026, and then to 7.4% of GDP in 2027. As a result, it will continue to drive up public debt, which could reach 125.8% of GDP in 2026 and 128.6% of GDP in 2027.

• Globally

After reaching 3.5% in 2025, growth in global economic activity is expected to slow to 3.0% in 2026, the lowest level since 2020. It is then expected to rise to 3.2% in 2027 and stabilize at that level on average annually from 2028 to 2030.

The global economy demonstrated resilience in 2025 despite the tariffs introduced by the U.S. administration. However, in 2026, the closure of the Strait of Hormuz disrupted global supply chains for several essential goods, such as fertilizers, aluminum, as well as oil and natural gas, triggering a historic energy shock.

— This shock has driven up inflation and weighed on economic activity in several economies, particularly in Europe and Asia. However, since the oil market is global, households and businesses in other economies have also felt the effects of rising gasoline prices, among other things.

— Furthermore, emerging and developing economies-whose GDP tends to be more dependent on oil inputs-have been more severely affected by the conflict in the Middle East than advanced economies.

The fiscal measures and budgetary initiatives implemented by several governments have partially mitigated the impact of rising energy prices, but the growing public debt of recent years is limiting their leeway.

For its part, global trade growth was high in early 2026 due to robust demand in the technology sector, which supported growth in several economies, particularly in Asia.

■ Monetary policies and financial markets

• The policy interest rate in Canada and the United States

The Bank of Canada has kept its policy interest rate unchanged since October 2025. It stood at 2.25% in summer 2026, its lowest level since July 2022.

— Given that inflation has risen above the 2% target and the economic uncertainty in Canada stemming from the trade dispute with the United States, the policy interest rate is expected to remain unchanged for the remainder of 2026.

— However, it is expected to rise by 25 basis points in early 2027 to reach 2.50%-which is within the Bank of Canada's neutral rate estimate range (between 2.25% and 3.25%).

For its part, the U.S. Federal Reserve paused its monetary easing in the first half of 2026, after cutting its policy interest rate three times in 2025 to bring it within the 3.50%-3.75% range. In addition, it underscored that inflation remains elevated and that there is a high degree of uncertainty surrounding the economic outlook in the United States.

— As a result, the Federal Reserve remains vigilant regarding the risks to its dual mandate: stable prices and maximum employment. It will be patient in order to assess the past effects of the energy shock caused by the conflict in the Middle East on inflation expectations. In the medium term, the U.S. policy interest rate is expected to approach 3%, which is roughly the level of the neutral interest rate for the U.S. economy as estimated by the Federal Reserve.

• Bond yields

Bond yields have risen sharply in most advanced economies since the conflict in the Middle East broke out. In Canada, in the first half of 2026, they reached their highest level in two years.

— Rising inflationary risk has led to a shift in market expectations. It is anticipated that several central banks will adopt less accommodative monetary policies this year, which has supported the rise in bond yields.

— In Canada, the yield on 10-year federal bonds has risen sharply, driven by accelerating inflation, as expectations of a rise in the Bank of Canada's policy interest rate have increased.

Bond yields will decrease in the second half of the year as global inflationary pressures gradually ease due to falling oil prices.

— Nevertheless, bond yields remain volatile and could settle at higher levels than expected, particularly given the risks associated with public finances and the political situation in certain advanced economies.

• Oil prices

Oil prices have risen sharply since the war in the Middle East broke out in late February 2026, as the closure of the Strait of Hormuz and the decline in the oil production of the Persian Gulf countries have triggered an oil shock.

— In particular, the price of West Texas Intermediate (WTI) averaged close to US$100 per barrel in April and May 2026, a nearly four-year high. However, it subsequently fell to close to US$70 per barrel in early July 2026.

In its June 2026 report, the International Energy Agency (IEA) estimated that, in May 2026, global oil supply was 13.6 million barrels per day (mb/d) below its pre-conflict level.

— According to the IEA, global oil supply is expected to decline by 3.9 mb/d in 2026 before rebounding by 8.0 mb/d in 2027, reaching more than 110 mb/d, supported by the projected recovery in oil exports from the Middle East.

For its part, global oil demand is expected to decline by 1.1 mb/d in 2026 before growing by 2.0 mb/d the following year, due, in particular, to the normalization of oil flows, the replenishment of global inventories, and the improvement in the global economic situation.

— Furthermore, in June 2026, the IEA projected that the oil market would face a slight global supply shortfall of just under 1.0 mb/d in 2026, which would represent a reversal from the significant surplus that had been expected before the conflict began (3.7 mb/d).

The gradual resumption of maritime traffic in the Strait of Hormuz in summer 2026 is expected to help drive down oil prices following a difficult first half of the year in the oil market.

— Oil prices are nevertheless expected to remain volatile during this period of normalization, and episodes of sharp fluctuations-both upward and downward-are expected to continue in the coming quarters. In this context of ongoing uncertainty, prudence is in order, and the WTI price is expected to average nearly US$80 per barrel in 2026.

TABLE 7

Sources: Statistics Canada, Bloomberg and Ministère des Finances du Québec.

■ Factors internal to the Québec economy

Economic forecasts are based on the assessment of the components of aggregate domestic demand as well as the external sector. The latter reflects, among other things, the ability of Québec businesses to take advantage of demand from Québec's main trading partners. Furthermore, the labour market situation and shift in inflation are key determinants of real GDP growth in Québec.

■ Domestic demand

Domestic demand consists of the sum of the following components:

— household consumption expenditure;

— residential investment;

— non-residential business investment;

— government expenditure on goods and services and investments.

After growing by 1.9% in real terms in 2025, domestic demand is expected to increase by 0.5% in 2026 and by 1.0% in 2027. Growth will stabilize at 1.1% on average annually from 2028 to 2030.

• Household consumption expenditure

After rising 1.8% in 2025, growth in consumption expenditure will slow to 1.1% in 2026. It will then increase to 1.6% in 2027. From 2028 to 2030, growth in these expenditures is expected to be 1.5% on average annually.

— The increase in households' consumption will be supported in part by their favourable financial position, characterized in particular by a high savings rate (7.8% in 2025), which will allow them to draw on their accumulated savings to fund their purchases. In addition, the debt ratio, which corresponds to the total value of liabilities divided by household disposable income, is down, falling from 158.6% in 2010 to 143.9% in 2025. This decline reflects the fact that households have some leeway in managing their finances. Consumers will also continue to benefit from relatively low interest rates, particularly when purchasing durable goods.

— Nevertheless, the expected population decline through 2029 will dampen demand for goods and services.

• Residential investment

After growing by 12.9% between 2023 and 2025, residential investment in real terms is expected to decline by 1.9% in 2026 and 1.7% in 2027. Despite these declines, the level of investment will remain high from a historical perspective. From 2028 to 2030, residential investment is expected to continue to fall (−2.6% on average annually).

— It bears noting that after significant declines in 2022 (−8.9%) and 2023 (−14.6%), residential investment has rebounded. This change was explained by latent demand for housing, resulting from strong population growth in 2023 and 2024, the fall in mortgage interest rates and by government initiatives aimed at increasing the housing stock.

— Over the next few years, the declining population will limit demand for housing. In a residential market that is already approaching equilibrium, this trend is expected to ease upward pressure on home prices and slow the pace of housing starts.

• Non-residential business investment

After a decline of 0.8% in 2025, non-residential business investment is expected to grow slightly in 2026 (+0.2%).

— Note that in 2025, the trade dispute led to the postponement, or even cancellation, of certain investment projects. Investments in machinery and equipment (−2.4%), whose components are mainly imported, were particularly affected.

As uncertainty surrounding the renegotiation of CUSMA subsides and export growth strengthens, the growth of these investments will accelerate. It is expected to rise to 1.7% in 2027, then average 2.4% annually from 2028 to 2030.

— In particular, investment in artificial intelligence is expected to intensify, driven by digital transformation and the search for productivity gains.

— In addition, despite the unstable trade environment, many projects are continuing, particularly in public transit and the mining sector. For its part, Hydro-Québec's Action Plan 2035 - Towards a Decarbonized and Prosperous Québec includes massive investments by 2035.

• Government expenditure on goods and services and investments

After increasing by 9.5% in 2025, the value of governments' investments is expected to increase by 3.3% in 2026 and 2.3% in 2027. Their growth will continue over the next few years (+1.7% in 2028, +2.2% in 2029 and +2.9% in 2030). The value of these investments, which include investments by the Québec government, the federal government, local public administrations and Indigenous public administrations, is therefore expected to reach $33.9 billion in nominal terms in 2030.

— In particular, investments under the 2026-2036 Québec Infrastructure Plan (QIP)7 will amount to $167 billion, of which $87 billion is planned for the first five years, that is, from 2026-2027 to 2030-2031.

— The agreement reached between the federal and provincial governments as part of the implementation of the Canadian Housing Infrastructure Fund (CHIF) to finance the construction and upgrading of municipal water infrastructure will also contribute to the growth of these investments.

— In addition, increases in the federal government's defence spending and investments are expected to help support public spending in the coming years.

Through their purchases of goods and services, the various levels of government will also support economic activity.

• Job creation, unemployment and the workforce

Over the next few years, the anticipated reduction in the labour force, due to the combined effects of population aging and declining immigration, is expected to result in a more moderate rise in employment.

— The labour force, defined as the number of people aged 15 and over who are looking for work or are employed, will decline through 2028 (−0.4% in 2026, −0.2% in 2027 and −0.3% in 2028), before returning to growth in 2029 (+0.1%) and posting a 0.3% increase in 2030.

The shrinking labour pool will dampen job creation. Furthermore, in the short term, the decline in overall demand for goods and services resulting, in particular, from the trade dispute and a high degree of uncertainty will continue to limit hiring.

— Accordingly, 15 400 jobs will be shed in 2026 (−0.3%). Job creation should resume in 2027 (+22 600 jobs, +0.5%). From 2028 to 2030, an additional 15 000 jobs are expected on average annually.

Since employers will have to deal with a smaller labour pool to fill their available positions, the unemployment rate is expected to remain relatively low in 2026 (5.6%). Subsequently, it is expected to resume a downward trend, averaging 4.9% in 2027, 4.3% in 2028 and then 4.1% in both 2029 and 2030. Against this backdrop, Québec will continue to move close to full employment.

■ Inflation

Despite rising protectionism in the United States and the introduction of high tariffs, inflationary pressures remained relatively contained in 2025, and CPI growth was 2.4% in Québec.

CPI growth is expected to accelerate and reach 3.0% in 2026.

— The conflict in the Middle East led to a surge in commodity prices, which increased pressure on production and transportation costs in the first half of 2026. The easing of geopolitical tensions is expected to gradually slow the rise in prices, particularly those of petroleum products, in the second half of 2026.

Starting in 2027, inflation is expected to return to close to the Bank of Canada's 2.0% target, due in part to the decline in oil prices and the slowing growth in housing prices. In Québec, inflation is expected to average 2.1% in 2027, and then 2.0% from 2028 to 2030.

■ External sector

In 2025, the imposition of tariffs on certain Canadian products, including aluminum and lumber, made Québec products more expensive for U.S. buyers. In this context, Québec's exports in real terms fell by 1.2%.

— This decline is due, in particular, to the drop in exports to the United States, the value of which fell by 7.0% over the course of the year. Conversely, the value of international exports to markets other than the United States rose by 10.8%, reflecting companies' efforts to diversify their export markets.

The persistence of the trade dispute and high levels of uncertainty will continue to dampen foreign trade, particularly with the United States. Québec's export volume is therefore expected to decline again in 2026 (−0.4%).

It will return to growth in 2027 (+1.9%), as uncertainty eases and companies continue their efforts to increase exports outside the United States. Total export growth is expected to stabilize thereafter to 2.0% on average annually from 2028 to 2030.

Like exports, imports are expected to decline by 0.5% in 2026, before rebounding and growing by 1.4% in 2027 and 2028, and then 1.2% in both 2029 and 2030.

— The weakness of imports in 2026 is partly due to the decline in investment in machinery and equipment (−1.5%), whose components are mainly purchased from abroad. Additionally, trade tensions are prompting Québec businesses to become less dependent on U.S. imports.

❏ Risks and sensitivity analysis for economic forecasts

■ Risks

The financial market and economic forecasts are based on several assumptions. Associated with some of these are risks that could affect the forecast scenario and, as a result, the expected changes in the Québec economy.

The risks described in Budget 2026-2027 remain present.⁸

— Given the Québec economy's high degree of openness to trade, Québec's economic variables could be influenced by several external factors, such as:

— changes in U.S. economic and trade policies;

— a worsening of geopolitical tensions;

— a broad-based weakening of the global economy;

— a different evolution of oil prices;

— potential disruptions in financial markets, stemming in particular from an excessive increase in debt levels in advanced economies, or from overestimated earnings growth expectations for certain technology companies whose market capitalization is already at very high levels.

— Other risks or events are internal. They could lead to changes in certain economic variables in Québec other than what was forecast, such as:

— a significant price correction in the real estate sector in Québec and Canada;

— population growth that differs from what was expected;

— persistent weakness in non-residential business investment;

— high inflation, which would persist longer than expected.

The baseline economic scenario is balanced. Nevertheless, it is not shielded from events that could impact economic activity, both on the downside and the upside.

— Specifically, a recession could arise, for example, in the event of an escalation of the trade dispute, complications in the CUSMA negotiations or worsening geopolitical tensions, in particular in the Middle East. Conversely, if a trade agreement were to be reached between Canada and the United States or certain sectoral tariffs were to be withdrawn, this would reduce uncertainty and lead to stronger economic growth. The effects of these various scenarios are presented in Section 7.

■ Sensitivity analysis

Economic forecasts take into account certain elements of uncertainty. The realization of these uncertainties may lead to different results than those forecast.

■ Impacts of external variables on the Québec economy

The results of a sensitivity analysis conducted with a structural vector autoregression model⁹ on the basis of historical data show that a 1% variation in U.S. real GDP entails, on average, a change of 0.45% in Québec's real GDP.

— The maximum effect occurs two quarters later.

Moreover, this model shows that a 1% variation in Ontario's real GDP gives rise on average to a change of 0.42% in Québec's real GDP.

— The maximum effect is felt one quarter later.

Ontario is the Canadian province with which Québec has the most commercial ties. Furthermore, the two provinces have a similar economic structure.

In 2022, exports to Ontario accounted for 58.9% of Québec's interprovincial exports. Also, the effects measured for Ontario and the United States are not additive.

TABLE 8

Impact of external shocks on Québec's real GDP growth rate

(1) Maturity corresponds to the number of quarters needed to record the greatest impact on Québec's real GDP, presented in the right-hand column.

Sources: Institut de la statistique du Québec, Statistics Canada, Ontario Ministry of Finance, S&P Global, Bloomberg and Ministère des Finances du Québec. 

1.3 Main adjustments since March 2026

Overall, from 2026 to 2030, the economic forecasts underlying the financial framework in the pre-election report are comparable to those in Budget 2026-2027.

— Economic growth in Québec is expected to reach 0.7% in 2026 and 1.4% in 2027.

— For 2026, this is a downward adjustment of 0.4 percentage points from the March 2026 forecast. The growth forecast for 2027 to 2030 remains unchanged.

— In particular, the forecast in the pre-election report factors in the gradual resumption of maritime shipping in the Strait of Hormuz in summer 2026. However, the full normalization of shipments and production in this region will happen gradually over the coming quarters.

— Changes to certain tariffs, particularly those that came into force on April 6, 2026 targeting metal products, as well as a more pronounced population decline in 2026, are also behind this downward adjustment.

Since March, like the Ministère des Finances, the private sector has made a downward adjustment to its economic forecast for 2026.

— As at June 18, 2026, private sector economists anticipate, on average, an increase in real GDP of 0.5% for 2026. This is a downward adjustment of 0.5 percentage points compared to what they had forecast in March 2026 (+1.0%).

— Note that this forecast is slightly lower than that of the Ministère des Finances (+0.7%). The discrepancy between private sector forecasts reflects the uncertainty surrounding the current economic situation, with the lowest forecast at 0.2% and the most optimistic at 0.8%.

— For 2027, private sector economists expect, on average, an increase in real GDP of 1.6%, a forecast that remains unchanged from March 2026.

— This forecast is slightly higher than that of the Ministère des Finances (+1.4%).

TABLE 9

Economic outlook for Québec - Comparison with the private sector

Note: Averages may not add due to rounding.

(1) Ministère des Finances du Québec survey as at March 9, 2026, which includes the forecasts of 10 private sector institutions.

(2) Ministère des Finances du Québec survey as at June 18, 2026, which includes the forecasts of 10 private sector institutions.

Source: Ministère des Finances du Québec. 

2. FINANCIAL FRAMEWORK

2.1 Multi-year budgetary outlook

The Pre-election Report on the State of Québec's Public Finances - August 2026 presents the revenue and expenditure outlook for the Québec government until 2030-2031.

Revenue will amount to $168.4 billion in 2026-2027, with growth of 5.0%. Growth will decrease to 3.5% in 2027-2028.

— Over the period covered by the financial framework, that is, until 2030-2031, annual revenue growth will average 3.3%.

In 2026-2027, growth in portfolio expenditures will reach 3.4%, compared to 3.0% in 2025-2026.

— The slowdown in growth in 2028-2029 and 2029-2030 is due to the impact of the stabilization of investments for infrastructure belonging to third parties and initiatives stemming from the expenditure review. Excluding these elements, growth would be 2.2% and 2.0%, respectively.

Total expenditure, including debt service, will stand at $171.6 billion in 2026-2027, with growth of 3.4%. Growth will be 2.5% in 2027-2028.

— From 2026-2027 to 2030-2031, annual growth in total expenditure will average 2.3%.

The change in revenue and expenditure takes into account the fiscal measures and budgetary initiatives that have been announced since the release of Budget 2026-2027.

The financial framework includes a total contingency reserve of $8.0 billion, with $2.0 billion in 2026-2027 and $1.5 billion per year as of 2027-2028, which could be used, in particular, to cover unforeseen expenditures or mitigate the effects of more-moderate-than-anticipated economic growth.

— The $2.0 billion contingency reserve that was provided for 2025-2026 was not used, as was also the case in 2024-2025.

The financial framework still includes gaps to be bridged of $1.9 billion in 2028-2029 and then $2.0 billion per year as of 2029-2030.

TABLE 10

Multi-year financial framework

Note: Totals may not add due to rounding.

(1) Average annual growth rate, corresponding to the geometric mean over five years, from 2026-2027 to 2030-2031.

(2) Growth in 2028-2029 and 2029-2030 is affected by the impact of the stabilization of investments for infrastructure belonging to third parties and by initiatives stemming from the expenditure review. Excluding these elements, growth would be 2.2% and 2.0%, respectively.

(3) The accounting surplus (deficit) before the gap to be bridged corresponds to the accounting surplus (deficit) presented in the budget documents. In accordance with the presentation requirements of the public sector accounting standards applied in preparing the public accounts, an illustration of the accounting surplus (deficit) once the gaps have been bridged is provided in Section 3.1. For example, in 2028-2029, once the gap has been bridged, the accounting surplus will amount to $1 126 million. 

2.2 Main variables of the financial framework

TABLE 11
Main variables of Québec's financial framework and debt

2.3 Assumptions, risks and margins for prudence of the financial framework

The Ministère des Finances' forecasts rely on economic and budgetary assumptions.

For example, Québec's real GDP forecast takes into account certain external factors, such as the economic growth of Québec's major trading partners, exchange rates and oil prices, as well as internal factors, such as changes in domestic demand.

Certain risks are associated with taking into account these assumptions. The sensitivity analysis is carried out to evaluate the impact of those risks on the forecasts and to present the estimated repercussions of a variation in any of the assumptions used to establish the financial framework.

TABLE 12

Main assumptions of Québec's financial framework

 ❏ Risks and sensitivity analysis

While the economic forecast under the Ministère des Finances baseline scenario is balanced, it is not shielded from events that could influence changes in economic activity, both on the downside and the upside.

Developments in the trade dispute with the United States constitute the main risk to the baseline scenario. Other risks could also cause Québec's economy to deviate from the expected trajectory. In particular, a shift in inflation from that expected in the baseline scenario, as a result of an escalation in tensions in the Middle East, for instance, would have effects on the parameters and assumptions underpinning the forecasts for the components of the financial framework. Consequently, the sensitivity analysis results could be substantially different from those initially anticipated.

(1) Unless otherwise indicated, this is the annual financial impact.

(2) Own-source revenue excluding revenue from government enterprises.

(3) The alternative scenarios are presented in Section 7.

(4) Natural disasters include, in particular, impacts linked to climate change.

(5) Ultimately, in the fifth year, a higher-than-anticipated rise in interest rates of 1 percentage point would increase debt service by $1.8 billion.

(6) Ultimately, in the fifth year, a lower-than-anticipated return on the RPSF of 1 percentage point would increase debt service by $209 million.

❏ Margins of prudence in the financial framework

The provisions included in the financial framework total $9.0 billion through 2030-2031:

— a Contingency Fund reserve of $1.0 billion over five years, namely $200 million per year from 2026-2027 to 2030-2031 to respond to an unexpected increase in expenditures;

— a contingency reserve of $8.0 billion over five years-$2.0 billion in 2026-2027 and $1.5 billion per year thereafter-which could be used, in particular, to cover unforeseen expenditures or to mitigate the effects of more-moderate-than-anticipated economic growth.

TABLE 14

2.4 Main adjustments since March 2026

This section summarizes the main adjustments of the financial framework since the publication of Budget 2026-2027, in March 2026.

❏ Change in the budgetary situation in 2025-2026

The Public Accounts 2025-2026 show a decrease in the budgetary deficit of $2.2 billion compared to what was forecast in March 2026. These adjustments stem mainly from:

— a $779-million increase in own-source revenue excluding revenue from government enterprises, resulting mainly from tax revenues due to better-than-expected results at the end of 2025-2026, tied to the upward adjustment to nominal GDP growth of 0.2 percentage points in 2025 and the impact on corporate taxes of the strong performance of gold mining companies in 2025;

— a $106-million decrease in revenue from government enterprises, mainly due to decreased revenue from Hydro-Québec as a result of cold winter temperatures, which led to a decline in short-term sales on export markets and an increase in electricity purchases to meet high demand;

— a $774-million decrease in revenue from federal transfers, resulting from the pace of completion of projects receiving federal funding¹⁰ and from the upward adjustment of the value of the special Québec abatement, which reduces Québec's cash transfers;¹¹

— planned but unrealized portfolio expenditures totalling $2.2 billion, primarily due to lower operating expenses and, to a lesser extent, the slower-than-expected pace of completion of subsidized infrastructure projects.

As a result of these improvements, the budgetary deficit within the meaning of the Balanced Budget Act, after taking into account deposits of dedicated revenues in the Generations Fund, stands at $7.8 billion for 2025-2026, according to the final results published on July 17, 2026 in the Public Accounts 2025-2026.

TABLE 15

Note: Totals may not add due to rounding.

Comparison of deficits in Canada

In 2025-2026, all Canadian provinces showed budgetary deficits. On a comparable basis to the budgetary balances of other Canadian provinces, that is, before deposits of dedicated revenues in the Generations Fund, Québec's deficit stands at $5.5 billion in 2025-2026, or 0.9% of GDP. This is one of the lowest deficits among Canadian provinces, according to information available as at July 17, 2026. Like most Canadian provinces, Québec must rectify its fiscal deficit situation in the medium term. However, it stands out for having a law that, like in Ontario and Alberta, requires a plan or timeline for restoring balance when a deficit occurs. - However, this law requires a return to a balanced budget after deposits of dedicated revenues in the Generations Fund, which imposes an additional constraint for Québec compared to other provinces. Québec is aiming to return to a balanced budget by 2029-2030, while several other provinces with deficits have not set a date.

2025-2026 budgetary balance

(percentage of GDP)

Notes: For Québec, this is the accounting deficit, that is, before deposits of dedicated revenues in the Generations Fund. This deficit is comparable to that of other provinces. The data are from the 2026-2027 budgets, with the exception of Québec and Saskatchewan; the figures for those two provinces are from their public accounts 2025-2026. For the federal government, this is the balance presented in the March 2026 Fiscal Monitor published on May 29, 2026.

❏ Adjustments in the financial framework from 2026-2027 to 2028-2029

This section presents the recent developments in Québec's budgetary situation as well as the main adjustments to the forecasts from 2026-2027 to 2028-2029.

Higher-than-expected revenue and the directions taken since the release of Budget 2026-2027 result in upward adjustments to the government's financial situation totalling $922 million
in 2026-2027, followed by budgetary balances that are projected to remain unchanged in 2027-2028 and 2028-2029.

The financial framework presented takes into account the risks associated with the economic situation, including the trade dispute with the United States and the conflict in the Middle East, the impact of higher-than-expected inflation on collective bargaining agreements for government employees and government decisions made since the release of Budget 2026-2027.

— Given the economic environment, the government is maintaining an $8.0-billion contingency reserve over the period covered by the financial framework, including $2.0 billion in 2026-2027. This reserve could be used, in particular, to cover unforeseen expenditures or mitigate the effects of more-moderate-than-expected economic growth.

■ Adjustments in the economic and budgetary situation

Overall, changes in the economic and budgetary situation result in positive adjustments totalling $1.7 billion in 2026-2027, $1.2 billion in 2027-2028 and $751 million in 2028-2029. In particular, these are attributable to:

— positive adjustments to own-source revenue excluding revenue from government enterprises of $1.2 billion in 2026-2027, $877 million in 2027-2028 and $852 million in 2028-2029, primarily due to the recurrence of the more favourable results observed in 2025-2026, the upward adjustment to household consumption¹² of 0.8 percentage points in 2026, and the upward adjustment to the Generations Fund's investment income in 2026-2027, the effect of which is partially offset by the downward adjustment to school property tax revenue starting in 2026-2027. More specifically, these adjustments concern mainly:

— personal income tax, for which the $143-million adjustment in 2026-2027 is due, in particular, to the 0.3-percentage-point upward adjustment to wages and salaries in 2026. Adjustments will decrease to $71 million in 2027-2028 and to $106 million in 2028-2029, due, in particular, to the upward adjustment of the tax system's indexation in 2027 in connection with the higher inflation projected for 2026;

— corporate taxes, for which the $201-million adjustment in 2026-2027 is due, in particular, to the recurrence of some of the better-than-expected results in 2025-2026 and by the downward adjustment of total exports by 0.3 percentage points in 2026. Adjustments will decrease to $82 million in 2027-2028 and to $34 million in 2028-2029, due, in particular, to downward adjustments of 2.0 percentage points in the net operating surplus of corporations and 0.4 percentage points to total exports in 2027;

— consumption taxes, for which the $744-million adjustment in 2026-2027 is due, in particular, to the recurrence of better-than-expected results in 2025-2026 and to the upward adjustment of household consumption by 0.8 percentage points in 2026. The adjustments are then stable, reaching $759 million in 2027-2028 and $737 million in 2028-2029;

— an increase in revenue from government enterprises of $55 million in 2026-2027 and downward adjustments of $234 million in 2027-2028 and $75 million in 2028-2029, primarily due to changes in Hydro-Québec's results, resulting in particular from the postponement of the anticipated date for signing the agreement with Churchill Falls, as well as recent decisions issued by the Régie de l'énergie;

— an increase in federal transfers of $915 million in 2026-2027, $1.1 billion in 2027-2028 and $621 million in 2028-2029;

— Since the publication of Québec's March 2026 budget, the federal government has announced funding for the provinces to support childcare services and boost the housing supply. Québec has also entered into agreements with the federal government as part of the implementation of the Canada Public Transit Fund and the Build Communities Strong Fund.¹³

— an increase in portfolio expenditures of $47 million in 2026-2027, $569 million in 2027-2028 and $575 million in 2028-2029;

— The adjustments are primarily due to an increase in expenditures funded by the federal government in public transit and water infrastructure projects for municipalities and, for 2027-2028 and 2028-2029, to higher remuneration expenditures resulting from the potential application of the salary adjustment clause for government employees in 2026-2027, which depends on current inflation rate forecasts. These upward adjustments are mitigated by the reversal of the initiative reserve provided for in the financial framework of the last budget.¹⁴

— an increase in debt service of $248 million in 2026-2027, a decrease of $61 million in 2027-2028 and an increase of $62 million in 2028-2029;

— The upward adjustment in 2026-2027 is due to higher-than-expected interest rates, resulting in losses on the disposal of assets as part of the Sinking Fund's investment activities related to government borrowings. Debt service will be lower in 2027-2028 due to the smaller deficit in 2025-2026, which has a permanent downward effect on debt service. The upward adjustment in 2028-2029 stems from the impact-which increases over time-of the lower return on the RPSF in 2025-2026, which more than offsets the impact of the smaller deficit in 2025-2026.

— an increase in deposits of dedicated revenues in the Generations Fund of $135 million in 2026-2027, followed by $10 million in both 2027-2028 and 2028-2029.

■ Initiatives and other adjustments incorporated into the financial framework

The financial framework incorporates the various initiatives announced since the publication of Budget 2026-2027, whose total financial impact amounts to $799 million in 2026-2027, $438 million in 2027-2028 and $351 million in 2028-2029.

The financial framework also includes the elimination of the $750 million gap to be bridged in 2027-2028, as well as a $400 million reduction in the gap in 2028-2029.

TABLE 16

Note: Totals may not add due to rounding.

(1) Other revenue includes school property tax, revenue from duties, permits and royalties, as well as miscellaneous revenue.

(2) The downward adjustment in other revenue is primarily due to a decrease in revenue from the school property tax starting in 2026-2027. 

3. PLAN TO RESTORE FISCAL BALANCE

The purpose of the Balanced Budget Act is to balance the government's budget. In particular, the Act provides for the presentation of a plan to restore fiscal balance when the budgetary deficit reported for a given fiscal year exceeds the dedicated revenues in the Generations Fund for that year.

— Like Québec, three other provinces expect to return to a balanced budget within the period covered by the financial framework: Manitoba in 2027-2028, Ontario in 2028-2029, and Saskatchewan in 2030-2031. Furthermore, in accordance with current law, Alberta is expected to return to a balanced budget in 2029-2030.

— However, Québec legislation requires a return to a balanced budget after deposits of dedicated revenues in the Generations Fund, which imposes an additional constraint for Québec compared to other provinces.

Since the budgetary deficit within the meaning of the Act, as established based on the Public Accounts 2022-2023, tabled on December 11, 2023, was $6.1 billion and exceeded the dedicated revenues in the Generations Fund, which amounted to $3.1 billion, the government tabled, in Budget 2025-2026, a plan to restore fiscal balance that meets the following objectives:

— returning to a balanced budget over a maximum period of five years, namely by 2029-2030;

— shrinking deficits over the period covered by the financial framework;

— a maximum deficit of $1.5 billion in 2028-2029, corresponding to 25% of the $6.1-billion budgetary deficit reported in the Public Accounts 2022-2023.

The Balanced Budget Act requires a return to a balanced budget by 2029-2030. Large deficits, if not eliminated, limit the government's long-term ability to deliver public services, ensure intergenerational equity and respond to unforeseen economic shocks.

— This return to a balanced budget must, however, be achieved at a pace compatible with the current economic situation.

The restoration plan tabled as part of Budget 2025-2026 is thus in line with the following key policy directions:

— achieving and then maintaining a balanced budget;

— reducing the share of expenditure in the economy to a level similar to the pre-pandemic level;

— maintaining deposits of dedicated revenues in the Generations Fund and a long-term debt reduction objective;

— stimulating economic growth and narrowing the wealth gap with Ontario;

— providing predictable funding for the government's missions;

— continuing to make infrastructure investments.

The favourable change in revenue observed since the release of Budget 2026-2027 makes it possible to report results that are better than those forecast in March 2026.

3.1 Path for returning to a balanced budget

In Budget 2025-2026, the government presented a plan to gradually eliminate, by 2029-2030, the deficit of $13.6 billion projected for 2025-2026, after deposits of dedicated revenues in the Generations Fund. Budget 2026-2027 marked the second year of implementation of this five-year plan and allowed the presentation of better-than-expected results.

This improvement in the path for returning to a balanced budget continues in the Pre-election Report on the State of Québec's Public Finances - August 2026.

Compared to Budget 2026-2027, the budgetary deficit within the meaning of the Balanced Budget Act, after deposits of dedicated revenues in the Generations Fund, is adjusted downward by $2.2 billion in 2025-2026 and $922 million in 2026-2027.

— The budgetary deficit is $7.8 billion in 2025-2026, an improvement of $5.8 billion compared to the $13.6-billion deficit projected in the March 2025 budget.

Starting in 2027-2028, the balances forecast in Budget 2026-2027 remain unchanged, but include the elimination of the $750-million gap to be bridged forecast for 2027-2028 as well as a $400-million reduction in the gap forecast for 2028-2029.

The budgetary balance presented in the Pre-election Report on the State of Québec's Public Finances - August 2026 complies with the Act, as the projected deficits are less than or equal to those in the plan to restore fiscal balance tabled in March 2025.

The government is continuing its efforts and staying on track to return to a balanced budget by 2029-2030.

❏ Gaps to be bridged

The plan to restore fiscal balance was developed against the backdrop of an economy weakened by the trade dispute with the United States, which prompted the government to outline a gradual plan over five years and to refrain from specifying all the measures needed to restore fiscal balance.

— As this uncertain situation has yet to subside, the financial framework still includes gaps to be bridged of $1.9 billion in 2028-2029 and $2.0 billion in 2029-2030, which will need to be eliminated in order to achieve a balanced budget after deposits of dedicated revenues in the Generations Fund.

Furthermore, a return to more favourable economic conditions, as illustrated in the stronger growth scenario,¹⁵ would further stimulate economic activity and allow the gaps to be fully bridged.
This situation could occur, for example, if the United States were to remove tariffs on imports as part of CUSMA renewal negotiations.

The government also has different levers that would allow it to fully bridge the gap.

— It is continuing its initiatives aimed at creating more wealth and increasing Québec's economic potential.

— It will continue its representations to the federal government to obtain additional federal transfers, particularly for health and infrastructure.

— It could benefit from the non-utilization of the contingency reserve.

— It is committed to promoting efficiency and productivity gains for the delivery of public services.

3.2 Continuity of services and sustainability of public finances

Returning to a balanced budget contributes to the preservation of intergenerational equity and to the government's long-term ability to ensure the delivery of public services. Thus, achieving a balanced budget is an essential condition for the long-term sustainability of public finances and for controlling the change in the debt burden.

— This process is subject to the Balanced Budget Act and the Act to reduce the debt and establish the Generations Fund.

❏ Benefits of sound management of public finances

The sound management of public finances fosters a climate of confidence conducive to private investment, economic growth and higher productivity. Achieving a balanced budget is essential to the government's debt burden reduction strategy and to public and investor confidence.

In addition to ensuring greater intergenerational equity, reducing the debt burden contributes,
in particular, to sustainable funding for essential government missions, such as health and social services and education, while meeting the challenges of an aging population and climate change.

Moreover, it allows for investments in public infrastructure and strengthens Québec's ability to cope with economic crises. The sound management of public finances thus provides a solid foundation for collective wealth and sustainable prosperity.

■ Maintenance of deposits in the Generations Fund

Specific to Québec, the Generations Fund is a fiscal policy instrument that imposes a stricter definition of budgetary balance compared to other provinces. Deposits of dedicated revenues in the Generations Fund help reduce debt and its burden over time.

— Despite the deficit, Québec is maintaining these deposits. These deposits will amount to $2.5 billion in 2026-2027 and will total $12.7 billion over the five-year period of the return to a balanced budget, from 2025-2026 to 2029-2030.

❏ Impact of the plan to restore fiscal balance on the sustainability of public finances

In accordance with the Balanced Budget Act, in Budget 2025-2026, the government tabled a plan to restore fiscal balance, according to which balance will be achieved by 2029-2030 at the latest, after deposits of dedicated revenues in the Generations Fund.

Fiscal 2026-2027 marks the second year of implementation of this plan. Trends in the various indicators of public finance sustainability show that the plan to restore fiscal balance will have a favourable impact on Québec's public finances, allowing for advantageous comparison, in the future, with the pre-pandemic situation.

In the Pre-election Report on the State of Québec's Public Finances - August 2026, the government is maintaining its path for restoring balance, and it is on track to improve many sustainability indicators, as projected during the development of the plan to restore fiscal balance.

— The share of revenue as a proportion of GDP will be lower in 2029-2030 (24.7%) than it was in 2018-2019 (26.1%).

The plan to restore fiscal balance will also make it possible to reduce the share of expenditure as a proportion of GDP, and to return to a level similar to that before the pandemic. The initiatives taken as part of the plan to restore fiscal balance will help reduce the debt burden as a proportion of GDP and keep debt-servicing costs as a proportion of revenue at historically low levels.

— A low debt-servicing cost as a proportion of revenue provides leeway to better fund public services. Through these initiatives in particular, the proportion of revenues devoted to debt service will remain at historically low levels (6.5% in 2029-2030), thus preserving the government's budgetary flexibility.

TABLE 17

Notes: Differences may not add due to rounding.

The grey boxes are those showing a favourable impact on sustainability indicators.

(1) The gap to be bridged and the contingency reserve are not included in the calculation of ratios of revenue and expenditure as a proportion of GDP.

❏ Shares of revenue and expenditure in the economy

The shares of government revenue and expenditure in the economy generally follow similar paths.

In 2026-2027, the share of revenue in the economy stands at 25.2%, below the share of expenditure, which represents 25.7% of GDP.

— The decline in the share of revenue in the economy, from 26.1% in 2018-2019 to 25.2%
in 2026-2027, is due, in particular, to initiatives aimed at reducing the tax burden on Quebecers, such as the tax reduction announced in Budget 2023-2024 and government contributions to limit school tax increases.

— The increase in the share of expenditure in the economy, from 24.4% in 2018-2019 to 25.7%
in 2026-2027, results from one-time pandemic-related expenditures, the perpetuation of some of them, and government investments to fund public services, such as health and social services and education. It is also linked to actions taken reduce Quebecers' tax burden, such as the increases in the senior assistance amount announced in 2021 and 2022.

This gap will gradually be eliminated to maintain sound public finances over the long term.

— With the plan to restore fiscal balance, including actions having an influence on revenue and expenditure, the share of expenditure in the economy will gradually decline to 24.4% in 2029-2030, while that of revenue will stand at 24.7% over the same period.

CHART 11 Shares of revenue and expenditure in the economy

(percentage of GDP)

4. DETAILED REVENUE AND EXPENDITURE FORECASTS

4.1 Change in revenue

This section presents the government's revenue for 2025-2026 to 2028-2029. Government revenue totals $168.4 billion in 2026-2027, or $135.3 billion in own-source revenue and $33.0 billion from federal transfers.

— Revenue will total $174.2 billion in 2027-2028 and $178.8 billion in 2028-2029.

— Revenue growth is forecast at 5.0% in 2026-2027, 3.5% in 2027-2028 and 2.7% in 2028-2029.

TABLE 18

Change in revenue

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2026-2027 to 2028-2029.

(2) In 2026-2027, the growth in own-source revenue excluding revenue from government enterprises is due, in particular, to the 3.4% change in nominal GDP in 2026. It is mitigated by the impact of implementing a temporary sectoral exemption from contributions to the Health Services Fund in 2026 and 2027 and by the impact of zero-rating specific food and hygiene products starting July 15, 2026.

(3) In 2027-2028, the growth in own-source revenue excluding revenue from government enterprises is primarily due to the 3.4% change in nominal GDP in 2027 and the impact of harmonization with the accelerated depreciation and expensing measures announced in the 2024 federal budget.

(4) The increases in revenue from government enterprises between 2026-2027 and 2028-2029 are mainly due to the increase in Hydro-Québec's results, stemming, in particular, from higher export volumes with the commissioning of infrastructure related to two major export contracts to the United States. 

4.1.1 Own-source revenue excluding revenue from government enterprises

Own-source revenue excluding revenue from government enterprises consists mainly of tax revenue, including personal income tax, contributions for health services, corporate taxes, the school property tax, and consumption taxes.

— How it changes generally reflects change in economic activity in Québec and changes in the tax systems.

Own-source revenue also includes duties, permits and royalties, in particular, revenue from the carbon market, as well as miscellaneous revenue such as investment income, revenue from services rendered, and penalties, fines and recoveries.

Own-source revenue excluding revenue from government enterprises is expected to grow by 3.2% in 2026-2027. It will stand at 3.5% in 2027-2028 and 3.2% in 2028-2029.

TABLE 19

(1) Average annual growth rate, corresponding to the geometric mean over three years, from 2026-2027 to 2028-2029.

(2) In 2025-2026, the growth in revenue from personal income tax is due to the 4.5% increase in wages and salaries in 2025 and to the impact of 2025 financial market performance on capital gains realized by taxpayers.

(3) In 2026-2027, the growth in contributions for health services is due to the 3.3% increase in wages and salaries in 2026 and the impact of implementing a temporary exemption from contributions to the Health Services Fund in 2026 and 2027 to support the agricultural, forestry and fishing sectors.

(4) In 2025-2026, the growth in revenue from corporate taxes is due to the 3.5% increase in the net operating surplus of corporations in 2025 and to the impact of 2025 financial market performance on capital gains realized by corporations.

(5) In 2026-2027, the growth in revenue from corporate taxes is due to the 1.9% increase in the net operating surplus of corporations in 2026 and the impact of harmonization with the expensing measures announced in the fall 2025 federal budget.

(6) In 2028-2029, the change in revenue from corporate taxes is due, in particular, to the 3.3% increase in the net operating surplus of corporations in 2028 and the impact of harmonization with the accelerated depreciation and expensing measures announced in the 2024 federal budget.

(7) In 2026-2027, the growth in consumption taxes is due to the 3.5% increase in household consumption, excluding food expenditures and shelter in 2026. It is mitigated by a return to normal input tax refunds, due to the recovery in the production pace of businesses, and the impact of zero-rating specific food and hygiene products starting July 15, 2026.

(8) In 2025-2026, the growth in revenue from duties, permits and royalties is due, in particular, to the expected increase in revenue from natural resources, mainly mining revenue, the effect of which is partially offset by the decline in revenue from the carbon market.

(9) In 2026-2027, the change in revenue from duties, permits and royalties is due, in particular, to the implementation of a temporary reduction in passenger vehicle registration fees and the non-recurrence of a portion of the higher mining revenue observed in 2025-2026.

(10) In 2025-2026, the change in miscellaneous revenue is due, in particular, to the non-recurrence of a significant portion of the amount of $1.7 billion received in 2024-2025 to offset smoking-related health costs under the plan of arrangement between tobacco companies and their creditors.

❏ Tax revenue

Revenue from personal income tax, the government's largest revenue source, will stand at $50.9 billion in 2026-2027, up 4.0% compared to 2025-2026. It will reach $52.8 billion in 2027-2028 and $54.9 billion in 2028-2029, representing a growth of 3.7% and 3.8% respectively.

— This growth reflects, among other things, the increase in household income, including wages and salaries, which will grow by 3.3% in 2026, 3.5% in 2027 and 3.3% in 2028.

— It also reflects the change in all the parameters of the personal income tax system, such as indexation and the progressive nature of the tax system.

Contributions for health services will stand at $9.5 billion in 2026-2027, $9.9 billion in 2027-2028 and $10.3 billion in 2028-2029, an increase of 2.5%, 3.5% and 4.6% respectively. Among other things, this change in contributions for health services reflects:

— the growth in wages and salaries, which is expected to stand at 3.3% in 2026, 3.5% in 2027 and 3.3% in 2028;

— the impact of implementing a temporary exemption from contributions to the Health Services Fund in 2026 and 2027 to support the agricultural, forestry and fishing sectors, which are essential to the vitality of the regions.

Corporate tax revenue will reach $14.7 billion in 2026-2027, which represents growth of 0.7% compared to 2025-2026. It will reach $15.3 billion in 2027-2028 and $15.2 billion in 2028-2029, a change of 3.8% and −0.1% respectively.

— This change is influenced by the projected change in the net operating surplus of corporations of 4.8% in 2026, 1.1% in 2027 and 3.3% in 2028.¹⁶

— The decrease in 2026-2027 is due, in particular, to the non-recurrence of some of the impact on corporate taxes resulting from the strong performance of gold mining companies in 2025.

— It also reflects the reduction in the tax rate for SMBs from 3.2% to 2.2%, effective April 30, 2026.¹⁷

— Harmonization with the accelerated depreciation measures announced by the federal government since the release of the 2024 budget has a downward effect on corporate tax revenue growth in 2026-2027 and 2028-2029.