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When the
Generations Fund was created in 2006, Quebec's debt-to-GDP ratio was 42.7%, compared with the Canadian provincial government average of 25%. (Quebec's debt concept used was total debt, which was subsequently replaced by gross debt.) Interest on the debt was Quebec's third largest spending
59:
The
Generations Fund is dedicated exclusively to repaying Quebec's debt. The act establishing the Fund sets out a precise debt target – by fiscal year 2025-26 gross debt is not to exceed 45% of GDP. As of 31 March 2021, Quebec's gross debt was $ 210.1 billion, or 46.8% as a percentage of GDP.
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columnist Barrie McKenna says that by directing revenues into the
Generations Fund and investing the profits "Quebec is essentially issuing more debt than it really needs and taking on the risk of market corrections along the way." Hence, the investment returns of the fund should be viewed as
109:, while the objective to repay public debt is laudable, the only way to do this is to produce budget surpluses. The Quebec government's practice of treating a payment to the Generations Fund as an expense, rather than an investment "makes sense only for political marketing."
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At the time the
Generations Fund was created, it was difficult for the government to increase taxes. Instead, alternative sources of revenue were chosen that are allocated exclusively to the Fund. The Fund's main revenue source is water-power royalties paid by
60:(Gross debt corresponds to the debt contracted on financial markets, plus the net liability for the pension plans and other future benefits of public and para-public sector employees, minus the balance of the Generations Fund.)
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The book value of the
Generations Fund was $ 12.2 billion on 31 March 2021. The Generations Fund made debt repayments of $ 1 billion in fiscal year 2013-14, $ 8 billion in 2018-19 and $ 2 billion in 2019-20.
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credited the province's fiscal turnaround to the
Generations Fund. TD Bank economist Rishi Sondhi says the Fund provides a testament to the Quebec government's priority to lower its debt burden.
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and private producers of hydroelectricity. Other revenue sources are mining revenues, the specific tax on alcoholic beverages, and investment income generated by the Fund itself.
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A criticism of the
Generations Fund is that it acts as a "smokescreen" that merely obscures the budget's bottom line. According to Alexandre Laurin of the
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102:, Marc LĂ©vesque, notes that the 45% debt-to-GDP target is easy for the public to understand, and compliance is straightforward to verify.
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Quebec's debt levels and credit rating improved following the introduction of the
Generations Fund, along with the
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of 1996, says
University of Sherbrooke economist Luc Godbout. Former Vice-President and Chief Economist with the
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in accordance with an investment policy determined by the
Minister of Finance in collaboration with the Caisse.
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Quebec incurred little debt before the 1960s, but from 1958 it recorded deficits for 40 consecutive years.
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and, in so doing, mitigate the intergenerational transfer of the debt burden. Enacted in 2006, the
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item after health and education, and represented 12.7 cents of each dollar of budgetary revenue.
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352:
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340:"The Generations Fund Fails the Test of Fiscal Transparency for Quebec's budget"
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274:"La Belle province, le bel excédent: How Quebec Soothed its Savage Debt Beast"
310:"Much-touted success of Quebec's Generations Fund may be 'all smoke'"
325:"Canada Needs a New Fiscal Anchor. (Quebec Has One to Offer.)"
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A fund created by the Quebec government to reduce public debt
152:"Act to reduce the debt and establish the Generations Fund"
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Sums allocated to the Generations Fund are managed by the
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Act to reduce the debt and establish the Generations Fund
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compensation to taxpayers for bearing investment risk.
253:"Update on Québec's Economic and Financial Situation"
190:"Policy Forum: Quebec's Debt — Taming the Beast"
150:Quebec Ministry of Finance (1 November 2021).
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194:Canadian Tax Journal/Revue fiscal Canadienne
39:of no more than 45% by fiscal year 2025-26.
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100:Public Sector Pension Investment Board
77:Caisse de dépôt et placement du Québec
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323:LĂ©vesque, Marc (16 September 2020).
251:Gouvernement du Québec (Fall 2021).
134:"A Quebec Model for a Fiscal Anchor"
132:Godbout, Luc (21 September 2020).
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308:McKenna, Barrie (30 March 2018).
231:Quebec, Ministere des Finances.
216:Quebec, Ministere des finances.
290:Québec Ministère des Finances.
272:Sondhi, Rishi (30 July 2019).
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87:In 2018, then Quebec Premier
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327:. Finances of the Nation.
23:is a fund created by the
218:"Debt reduction targets"
292:"The Generations Fund"
233:"The Generations Fund"
139:. C.D. Howe Institute.
312:. The Globe and Mail.
188:Godbout, Luc (2019).
83:Impact and assessment
369:Canadian public debt
364:Government of Quebec
25:government of Quebec
338:Laurin, Alexandre.
107:C.D. Howe Institute
96:Balanced Budget Act
89:Philippe Couillard
359:Economy of Quebec
37:debt-to-GDP ratio
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342:. C.D. Howe.
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158:. Retrieved
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66:Hydro-Québec
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29:public debt
353:Categories
120:References
43:Background
35:targets a
27:to reduce
55:Operation
160:17 March
277:(PDF)
256:(PDF)
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137:(PDF)
162:2022
19:The
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