Québec budget 2025: Infrastructure spending takes center stage amid US tariff measures

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Québec budget 2025: Infrastructure spending takes center stage amid US tariff measures

Québec budget 2025: Infrastructure spending takes center stage amid US tariff measures

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March 27, 2025

On March 25, 2025, Québec Finance Minister Eric Girard announced Québec’s 2025–2026 provincial budget, titled Pour un Québec fort.¹ Confronted with mounting economic challenges, escalating trade tensions with the United States and a projected deficit of CA$11.4 billion, Budget 2025-2026 has identified infrastructure spending as a central pillar of the province’s economic resilience strategy.

A key assumption underlying Budget 2025-2026 is the impact of recent US tariffs, averaging 10% and expected to remain in effect for at least two years. American tariff measures are projected to reduce Québec’s GDP growth by 0.7% and cost the economy an estimated 25,000 jobs over that period. As a response to the economic pressures created by recent tariffs, Québec’s Budget 2025-2026 emphasizes targeted domestic investment as a counterbalance to external volatility.

While the provincial government acknowledges the scale of its CA$11.4 billion deficit for 2025–2026, representing 1.8% of the province’s GDP, it presents this shortfall as a calculated, temporary measure to preserve essential services and sustain economic momentum. Infrastructure is framed not as a cost, but as a strategic investment expected to generate long-term economic returns.

The Québec Budget and Its Impact on Infrastructure

A key pillar of Budget 2025-2026² is a commitment to the newly expanded Plan québécois des infrastructures 2025–2035 (PQI), which is embedded in the budget’s economic stimulus strategy. Complementary to the PQI, the Budget 2025-2026 allocates CA$1.6 billion in transitional financial assistance for businesses affected by trade disruptions, some of which is expected to support infrastructure upgrades, modernization of industrial facilities and supply chain improvements.

Inter-ministerial coordination is also a key focus of the budget. An emphasis has been placed upon the importance of aligning infrastructure-related spending with sectoral priorities in health, education, housing and transportation. The budget also renewed the province’s call for increased federal infrastructure transfers, especially for large-scale projects in transit and the energy transition.

A record infrastructure commitment

The PQI,³ newly updated in Budget 2025-2026,⁴ outlines a decade-long investment of CA$164 billion in Québec infrastructure. This PQI’s investment is meant to stimulate long-term economic growth while modernizing the province’s foundational assets. It seeks to strike a balance between maintaining existing infrastructure and expanding strategic capacity and allocates funding across a wide range of sectors that reflects both immediate priorities and long-term objectives.

The following breakdown highlights the main infrastructure sectors targeted by the PQI:

CA$35.868 billion – Road Network
To support road maintenance, highway upgrades and modernization of transportation corridors across the province.

CA$14.536 billion – Public Transit
Focused on network expansion, service improvement and electrification projects to reduce GHG emissions and improve mobility.

CA$24.719 billion – Health and Social Services
Includes major hospital expansions, CHSLD reconstructions and development of Maisons des aînés et alternatives.

CA$3.987 billion – Social and Community Housing
Targeted toward increasing access to affordable housing, particularly in vulnerable and underserved communities.

CA$23.481 billion – Primary and Secondary Education
Supports school maintenance, classroom expansion, modular construction and urgent work related to safety and building integrity.

CA$8.957 billion – Higher Education
Dedicated to campus renovations, new student residences and modernized teaching and research infrastructure.

CA$5.720 billion – Maritime, Air, and Rail Transport
Investments in intermodal infrastructure to improve regional and international transport efficiency.

CA$8.639 billion – Digital and Information Infrastructure
Modernizes government information systems, enhances service delivery and supports digital transformation in the public sector.

CA$5.3 billion – Government Administration
Construction, renovation and modernization of administrative buildings and government facilities to improve operational efficiency.

CA$1.4 billion – Environment
For projects aimed at environmental protection, climate change adaptation, sustainable land use and biodiversity conservation.

CA$2.5 billion – Culture
To support the renovation, expansion and development of cultural infrastructure such as museums, theatres, libraries and heritage sites.

CA$1.2 billion – Development of sport and recreation
Dedicated to building and upgrading sports facilities and recreational infrastructure to promote active lifestyles and support community well-being.

CA$1.5 billion – Development of northern regions and Indigenous communities
Investment in infrastructure that supports regional vitality, Indigenous community development and access to essential services in remote and northern areas.

The projects outlined in the PQI are expected to boost regional development, accelerate climate adaptation and address demographic shifts across the province. In addition to maintaining and modernizing physical structures, Budget 2025-2026 emphasizes accelerated project delivery timelines, especially in health and education and the prioritization of high-impact regional infrastructure.

Delivering on Infrastructure: Planning, execution and oversight

The Québec government’s Budget 2025-2026 also emphasized the importance of improving project delivery efficiency. The PQI is supported by a strengthened framework that includes optimized planning through the Stratégie québécoise en infrastructures publiques,⁵ introduced in 2024, which prioritizes cost control, project acceleration and overall improvements to public infrastructure. It also calls for enhanced coordination across ministries and agencies to prevent bottlenecks and reduce delivery delays. In addition, a performance-tracking system has been introduced to ensure accountability and alignment with regional and sectoral priorities. The plan further recognizes the role of private sector participation and seeks to foster a more competitive environment for infrastructure delivery, notably through improved procurement strategies and updated project evaluation tools.

Conclusion

Infrastructure takes on renewed strategic importance in Québec’s Budget 2025-2026, reflecting its central role in driving both economic recovery and resilience. By increasing its infrastructure commitments in the face of economic challenges and global uncertainty, Québec is betting on public investment as both a social good and an economic driver. As new projects roll out and funding is allocated, the focus will shift towards implementation efficiency and long-term impact. With CA$164 billion on the table, Québec now faces the challenge of turning its vision into results.

Should you have any questions about the budget’s infrastructure-related initiatives or other issues related to public infrastructure or public-private partnerships, please contact the authors, Lampros Stougiannos, Anoosh Loertscher or any member of Dentons’ Infrastructure and Public-Private Partnerships group.⁶ The authors would like to thank Gerikson Castillo, Dentons articling student in Montréal, for his contributions to this insight.