What a post COVID-19 world could look like
Quebec said it may need as long as five years to balance its books after the coronavirus pandemic upended its budget plans.
Finance Minister Eric Girard said Canada’s second-largest economy will shrink between four per cent and six per cent this year and won’t return to 2019 levels until the end of 2021. Exiting deficits will take three to five years, he predicted in a news conference Wednesday.
While several straight years of budget surpluses helped the province reduce debt and enter the crisis in a strong fiscal position, the scope of the pandemic was insurmountable. Girard said 40 per cent of Quebec’s economy shut down in April and reiterated Premier Francois Legault’s forecast that the deficit would reach $12 billion to $15 billion this year.
“We’re committed to returning to a balance over three to five years,” Girard said. “What’s important is to have a credible plan, and we have a plan, and we have guidelines.”
The deficit, as defined by Quebec, is after a contribution to a debt-reduction pool known as the Generations Fund, he said.
Still, part of the forecast hinges on restarting the economy in Montreal, where dozens of daily deaths have forced the government to delay the reopening of stores and schools. The planned date is currently May 25, though data suggest it may be pushed back again, which would be “less good,” Girard said.
“That the economy is slowly restarting is positive,” he said. “What’s certain though, is that for some economic sectors like tourism, restaurants, culture, the effects will last longer.”