The Conference Board of Canada forecasts Quebec’s real economic growth will be 1.6% per year between fiscal years 2009-2010 and 2030-2031. This tepid performance is due to weak demographic growth, which is anticipated to be only 0.7% annually for the next 20 years.
Provincial revenue growth is expected to average just 4% per year over this period, while expenditures are expected to grow at an average annual rate of 5.1%.
The rise in expenditures will be primarily due to the rapid increase in the province’s healthcare spending, which the Conference Board’s projects will grow at an average annual rate of 5.9% over the entire forecast period. The Conference Board estimates healthcare spending will increase approximately $63 billion from now until 2030.
The province’s aging population will lead to an increase in the number of people in age brackets where costs are highest. In fact, the 65-and-older age group will expand by an average of 3% over the next 20 years, as opposed to the five to 24 age group, which will expand by only 0.4% during the same period.
The study also shows that if the government tries to exclusively use the provincial sales tax to maintain a balanced budget until 2030-2031, the provincial sales tax rate would have rise to 19.5% by 2030.
