Balanced Budget Act (Quebec)
The Government of Quebec adopted the Balanced Budget Act (BBA) in 1996. The BBA prohibits a budget deficit, other than in special circumstances. Background Quebec incurred little debt before the 1960s, but from 1958 it recorded deficits for 40 consecutive years. Accumulated debt reached more than $100 billion (over 40% of GDP) by 1998. (The debt of the province of Quebec is separate from the debt of the federal government of Canada.) Quebec's credit rating was downgraded by Moody's in 1993 and 1995 and, in 1996, there were fears of a further downgrade. The Balanced Budget Act (BBA) was adopted unanimously by Quebec's legislative assembly in 1996, and incoming Premier Lucien Bouchard said balanced budgets were a priority "to save future generations from debt and despair" and "to protect the government's ability to act". The budget balance mechanism Under the Balanced Budget Act (BBA), the government is prohibited from incurring a budget deficit, other than in the special circumstances of a disaster that has a major impact on revenues or expenditures; a significant deterioration in economic conditions; or any substantial reduction in federal transfer programs. In the event of a deficit, the BBA sets out a path for a return