Quebec budget responds 'with strength' to Trump tariffs, plunges province deeper into debt

Quebec's finance minister on Tuesday presented a budget that boosted government spending to unprecedented levels to better weather economic headwinds.

Rising in the National Assembly to present the 2025-26 budget, Eric Girard said Quebec must "respond with strength" to the threat of U.S. tariffs. Girard, who has repeatedly touted the Coalition Avenir Québec (CAQ) government's ability to responsibly manage public finances, said now was the time to increase the spending — even if it drove the province deeper into debt.

"The deficit is evidently too high," Girard said. "It's manageable. We're dealing with it. We have the responsibility to respond to the uncertainty, to support businesses."

The government's messaging for this year's $165.8-billion budget centred around the need to invest in the Quebec economy to better position it in the face of U.S. President Donald Trump's tariff threats.

Titled "For a Strong Quebec," the budget includes new investments of $12.3 billion over the next five years for "stimulating wealth creation and supporting Quebecers."

Much of that money will help businesses adapt to tariffs, invest in new projects and diversify their markets away from the U.S.

But the measures are driving up the province's debt.

Despite a concerted effort to reduce government administrative costs, which Girard said will generate billions in savings, government spending far outpaces revenue.

The projected deficit is ballooning to $13.6 billion and could go even higher if Trump's tariffs hit. But there is some good news, Girard said. Last year's "historic" projected deficit of $11 billion ended up being smaller — $10.4 billion thanks to a slightly better economic performance than forecast.

Speaking of forecasts, a cloud of uncertainty looms over this year's budget.

With each budget, the government has to make assumptions about how the economy will perform. But this year, it has also had to take a stab at estimating just how far Trump will go with his tariffs. Quebec is estimating that tariffs will be, on average, equivalent to 10 per cent and will be in place for two years.

If they are larger — Trump's position on tariffs has fluctuated, but he has threatened 25 per cent blanket tariffs on all Canadian goods — they would very likely throw the Quebec economy into a recession and, according to the budget documents, "permanently lower Quebec's economic potential."

Opposition parties accused the government of using the trade war with the U.S. as a scapegoat for mismanaging public funds.

Parti Québécois Leader Paul St-Pierre-Plamondon said the government was using the trade war to conceal its gaffes, including its failed investment in Northvolt and the more than $1 billion spent on SAAQclic.