Quebec\u2019s credit rating was downgraded in April 2025, which may raise concerns. Rating agency Standard & Poor\u2019s (S&P) lowered the province\u2019s financial evaluation, the equivalent of a \u201ccredit score\u201d for a government, citing weakened public finances. But why did this downgrade happen, and what does it mean? Here\u2019s the explanation.<\/p>\n
S&P justified its decision by pointing to Quebec\u2019s \u201cpersistent operating deficits,\u201d highlighted by a record $13.6 billion deficit announced in March 2025, marking a fourth consecutive budget in the red.<\/p>\n
According to the rating agency, several structural factors contribute to this imbalance: slowing population growth (fewer new taxpayers), rapidly rising public expenditures (especially salaries), and declining certain government revenues. This combination weakens Quebec\u2019s finances and led S&P to consider the province a riskier borrower.<\/p>\n
The downgrade is also explained by the budgetary decisions of the Legault government. In the face of inflation and public service needs, the Coalition Avenir Qu\u00e9bec (CAQ) prioritized high spending while avoiding additional tax burdens on citizens.<\/p>\n
For example, a recent agreement granted a 17.4% wage increase over five years to public employees, with the government considering anything less than inflation unacceptable. At the same time, it refused to raise taxes, preferring to \u201cleave money in Quebecers\u2019 wallets.\u201d These policies, however, worsened the public deficit.<\/p>\n
Fran\u00e7ois Legault stands by these decisions and says he has no regrets despite the S&P sanction. He acknowledges that the government will need to \u201cclean up\u201d the public sector to eliminate unnecessary spending, especially since the civil service has grown by roughly 17% since 2018.<\/p>\n
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