Quebec’s Efforts to Offset Trade War Impact on Workers with Economic Update
The Legault administration is taking proactive steps to alleviate the repercussions of the ongoing trade conflict with the U.S. on vital industries in the province. Finance Minister Eric Girard has revealed an economic update introducing various measures aimed at boosting the financial well-being of Quebec residents.
Key highlights of the economic update include tax relief for workers, utilizing the surplus from the Green Fund to address Quebec’s debt, and extending support to businesses adversely affected by the tariffs imposed by U.S. President Donald Trump. The economic forecast for 2025 and 2026 indicates a more significant economic growth trajectory for Quebec than previously estimated.
The projected deficit for 2025-26, as per the Balanced Budget Act, stands at $12.4 billion, a decrease from the prior estimate of $13.6 billion. The outlook assumes that the tariffs imposed by the Trump administration on Quebec will likely remain below 10%. The province anticipates a real GDP growth of 0.9% in 2025 and 1.1% in 2026, following a 1.7% increase in 2024.
Minister Girard’s strategy aims to help workers save $1.8 billion over five years by reducing contribution rates to the Quebec Pension Plan (QPP) and Quebec Parental Insurance Plan (QPIP). Effective January 1, 2026, employees in Quebec could save up to $137, with self-employed individuals potentially saving $259, as outlined in the economic update.
In a bid to manage the province’s debt, Girard plans to redirect the $1.8 billion Green Fund surplus towards the Generations Fund in 2026-27. This decision is intended to promote intergenerational fairness and offer long-term financial flexibility to Quebecers. The surplus largely stems from the previous government, and its utilization requires the passage of Bill 7, spearheaded by Treasury Board President France-Élaine Duranceau.
The government’s ongoing efforts to balance the budget by 2029-30 include reducing Quebec’s net debt burden to 32.5% of GDP by 2037-38. Furthermore, initiatives such as canceling the increase in the capital gains inclusion rate and implementing a 2.05% indexation of the personal income tax system and social assistance benefits aim to benefit Quebec citizens.
To support vulnerable populations, the government plans to allocate funding to programs improving housing conditions and increase the special benefit for infant formula purchases. Additionally, measures are being introduced to provide tax relief and expedited write-offs for businesses, particularly in sectors heavily impacted by the trade war.
Overall, Quebec’s economic update underscores a strategic approach towards mitigating the trade war’s effects, fostering economic growth, and enhancing the financial well-being of its residents.