Québec aims to reduce its public debt through the Generations Fund, which receives dedicated revenues to ease the burden on future generations.
Québec’s debt
Various debt concepts can be used to measure a government’s debt load. One of these is net debt. Net debt is calculated as the government’s total liabilities minus its financial assets, including the Generations Fund. Other provinces also use this concept.
Québec has made notable progress in reducing its debt load in recent decades.
The Act to reduce the debt and establish the Generations Fund aims to reduce the debt burden, that is debt as a proportion of the economy, and to ensure long-term financing of the government’s main missions as well as a prosperous tomorrow for future generations.
- As at March 31, 2026, Québec’s net debt (percentage of GDP): 38.8%
- Net debt reduction targets:
- 35,5% of GDP (±2.5% of GDP) as at March 31, 2033
- 32.5% of GDP (±2.5% of GDP) as at March 31, 2038
Generations Fund
The Generations Fund is an effective, transparent tool adopted by the Québec government to achieve its debt reduction targets. It allows the public to easily see the sums the government dedicates to debt reduction each year.
Three types of revenues are dedicated to the Generations Fund:
- water‑power royalties, which are paid by Hydro‑Québec and private hydroelectricity producers;
- an additional contribution from Hydro‑Québec, set at $650 million per year, taken from the dividend paid by Hydro‑Québec to the government;
- income generated by the investment of the sums making up the Generations Fund.
The sums dedicated annually to the Generations Fund are deposited with the Caisse de dépôt et placement du Québec. The returns generated help reduce the debt burden.
- Revenues dedicated to the Generations Fund in 2025‑2026: $2.3 billion
- Balance of the Generations Fund as at March 31, 2026: $16.6 billion