Quebec 18-K/A Annual report (foreign governments) (amended)

Exhibit 99.3

ISSN 1718-8377

Volume 9, number 2	September 19, 2014
AS AT JUNE 30, 2014

Highlights for June 2014

—   Budgetary revenue in June amounts to $6.2 billion, up $352 million compared to last year. Own source revenue amounts to   $4.8 billion, up $323 million compared to last year while federal transfers increase $29 million to stand at $1.4 billion.

—   Program spending amounts to $5.8 billion, up $151 million more than June, 2013.

—   Debt service stands at $689 million, down $10 million compared to last year.

—   Taking the $81 million deposited in the Generations Fund into account, the monthly budgetary balance within the meaning of   the Balanced Budget Act shows a deficit of $287 million for June 2014.

On the basis of the cumulative results as at June 30, 2014, the budget deficit, within the meaning of the Balanced Budget Act, amounts to $1.3 billion.

Summary of consolidated budgetary transactions
(millions of dollars)	(Unaudited data)

	June					April to June						2014-2015 Budget
		2013 (1)		2014		2013-2014 (1)		2014-2015		% Change		2014-2015		Forecast Growth %
Budgetary revenue
Own-source revenue			4 453		4 776		12 858		13 365		3.9		54 682		3.6
Federal transfers			1 353		1 382		4 117		4 201		2.0		16 691		–0.1
Total			5 806		6 158		16 975		17 566		3.5		71 373		2.7
Budgetary expenditure
Program spending			–5 654		–5 805		–16 740		–17 226		2.9		–65 704		1.8
Debt service			–699		–689		–2 017		–2 064		2.3		–8 583		1.7
Total			–6 353		–6 494		–18 757		–19 290		2.8		–74 287		1.8
Consolidated entities(2)
Non-budget-funded bodies and special funds			19		55		236		461		—		636		—
Health and social services and education networks			–17		–6		–17		–18		—		–72		—
Generations Fund			74		81		227		279		—		1 301		—
Total			76		130		446		722		—		1 865		—
Deficit			–471		–206		–1 336		–1 002		—		–1 049		—
Balanced Budget Act
Deposits of dedicated revenues in the Generations Fund			–74		–81		–227		–279		—		–1 301		—
BUDGETARY BALANCE WITHIN THE MEANING OF THE BALANCED BUDGET ACT			–545		–287		–1 563		–1 281		—		–2 350		—

(1) For comparison purposes, expenditures in 2013-2014 have been adjusted to take into account changes that the Ministère de l’Éducation, du Loisir et du Sport and the Ministère de l’Enseignement supérieur, de la Recherche et de la Science made in the monthly transfer expenditure breakdown rates for private establishments.

(2) Details of operations by type of entity are presented on page 6 of this report.

q Cumulative results as at June 30, 2014

¡ Budgetary balance

For the period from April to June 2014, the budgetary balance, within the meaning of the Balanced Budget Act, shows a deficit of $1.3 billion. A deficit in the first three months of the fiscal year reflects the historical trend. Indeed, during this period, expenditure usually exceeds revenue since government departments spend more heavily in respect of their activities.

The 2014-2015 Budget, tabled in June 2014 calls for a budgetary balance for 2014-2015 with a $2.4 billion deficit.

¡ Budgetary revenue

As at June 30, 2014, budgetary revenue amounts to $17.6 billion, $591 million more than as at June 30, 2013.

— Own-source revenue stands at $13.4 billion, $507 million more than last year at this time.

— Federal transfers amount to $4.2 billion, up $84 million compared to June 30, 2013.

¡ Budgetary expenditure

Since the beginning of the fiscal year, budgetary expenditure amounts to $19.3 billion, an increase of $533 million, or 2.8%, compared to last year.

For the fiscal year, program spending rose by $486 million, or 2.9%, and stands at $17.2 billion. The most significant changes are in the Education and Culture ($207 million) and Health and Social Services ($199 million) missions.

Debt service amounts to $2.1 billion, an increase of $47 million or 2.3 % compared to last year.

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¡ Consolidated entities

As at June 30, 2014, the results of consolidated entities show a surplus of $722 million. These results include:

— a surplus of $461 million for non-budget-funded bodies and special funds;

— revenue dedicated to the Generations Fund of $279 million;

— an $18 million deficit for the health and social services and the education networks.

¡ Net financial requirements

As at June 30, 2014, consolidated net financial requirements stand at $5.4 billion, an increase of $109 million compared to last year. Financial requirements reflect the current budget deficit as well as the variation, from one year to the next, in receipts and disbursements made in the course of the government’s operations.

Consolidated budgetary and financial transactions
(millions of dollars)	(Unaudited data)

	June						April to June
	2013 (1)		2014		Change		2013-2014 (1)		2014-2015		Change
Budgetary revenue
Own-source revenue		4 453		4 776		323		12 858		13 365		507
Federal transfers		1 353		1 382		29		4 117		4 201		84
Total		5 806		6 158		352		16 975		17 566		591
Budgetary expenditure
Program spending		–5 654		–5 805		–151		–16 740		–17 226		–486
Debt service		–699		–689		10		–2 017		–2 064		–47
Total		–6 353		–6 494		–141		–18 757		–19 290		–533
Consolidated entities(2)
Non-budget-funded bodies and special funds		19		55		36		236		461		225
Health and social services and education networks		–17		–6		11		–17		–18		–1
Generations Fund		74		81		7		227		279		52
Total		76		130		54		446		722		276
Deficit		–471		–206		265		–1 336		–1 002		334
Consolidated non-budgetary surplus (requirements)		–2 009		–637		1 372		–3 954		–4 397		–443
CONSOLIDATED NET FINANCIAL SURPLUS (REQUIREMENTS)		–2 480		–843		1 637		–5 290		–5 399		–109

(1) For comparison purposes, expenditures in 2013-2014 have been adjusted to take into account changes that the Ministère de l’Éducation, du Loisir et du Sport and the Ministère de l’Enseignement supérieur, de la Recherche et de la Science made in the monthly transfer expenditure breakdown rates for private establishments.

(2) Details of operations by type of entity are presented on page 6 of this report.

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General fund revenue
(millions of dollars)	(Unaudited data)

	June								April to June
Revenue by source	2013			2014			Change %		2013-2014			2014-2015			Change %
Own-source revenue excluding government enterprises
Income and property taxes
Personal income tax		1 759			1 983			12.7		4 744			5 067			6.8
Contributions to Health Services Fund		538			608			13.0		1 662			1 693			1.9
Corporate taxes		246			311			26.4		671			706			5.2
Consumption taxes		1 512			1 500			–0.8		4 322			4 456			3.1
Others sources		109			93			–14.7		479			467			–2.5
Total own-source revenue excluding government enterprises		4 164			4 495			7.9		11 878			12 389			4.3
Revenue from government enterprises		289			281			–2.8		980			976			–0.4
Total own-source revenue		4 453			4 776			7.3		12 858			13 365			3.9
Federal transfers
Equalization		653			773			18.4		1 958			2 321			18.5
Health transfers		428			404	(1)		–5.6		1 285			1 209	(1)		–5.9	(1)
Transfers for post-secondary education and other social programs		129			132			2.3		386			396			2.6
Other programs		57			73			28.1		229			275			20.1
Subtotal		1 267			1 382			9.1		3 858			4 201			8.9
Harmonization of the QST with the GST – Compensation		86	(2)					—		259	(2)					—
Total federal transfers		1 353			1 382			2.1		4 117			4 201			2.0
BUDGETARY REVENUE		5 806			6 158			6.1		16 975			17 566			3.5

(1) In accordance with the key directions of the 2014-2015 Budget of June 4, 2014, $430 million from the health transfers has been earmarked in the 2014-2015 for the Fund to Finance Health and social services institutions (FINESSS), which is part of the consolidated entities. The allocation is broken down throughout 2014-2015 at the rate of $36 million per month and has already been deducted from the health transfers. If not for this allocation, the change would be 2.4 % instead of -5.9 %.

(2) Recognation of revenue from federal compensation in respect of the harmonization of the sales taxes occurs at the rate of recognation of the expenditures financed by such compensation. Consequently, the payment in this respect of $1 467 million in 2013-2014 was broken down throughout 2013-2014 at the rate of $86 million per month for debt service expenditure. Moreover, the allocation of $430 million of the compensation to the FINESSS was also spread over the entire 2013-2014 fiscal year, at the rate of $36 million a month.

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General fund expenditure
(millions of dollars)	(Unaudited data)

	June						April to June
Expenditures by mission	2013 (1)		2014		Change %		2013-2014 (1)		2014-2015		Change %
Program spending
Health and Social Services		2 767		2 838		2.6		8 149		8 348		2.4
Education and Culture		1 687		1 763		4.5		4 684		4 891		4.4
Economy and Environment		331		285		–13.9		1 379		1 311		–4.9
Support for individuals and Families		520		541		4.0		1 563		1 638		4.8
Administration and Justice		349		378		8.3		965		1 038		7.6
Total program spending		5 654		5 805		2.7		16 740		17 226		2.9
Debt service		699		689		–1.4		2 017		2 064		2.3
BUDGETARY EXPENDITURE		6 353		6 494		2.2		18 757		19 290		2.8

(1) For comparison purposes, expenditures in 2013-2014 have been adjusted to take into account changes that the Ministère de l’Éducation, du Loisir et du Sport and the Ministère de l’Enseignement supérieur, de la Recherche et de la Science made in the monthly transfer expenditure breakdown rates for private establishments.

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Detailed information on the transactions of consolidated entities
(millions of dollars)	(Unaudited data)

June 2014

Special funds

Generations Fund

Specified purpose accounts

Transfers (expenditures) related to the tax system

Non-budget- funded bodies

Health and education networks (1)

Total

Consolidation adjustments (2)

Total

Revenue

889

81

29

350

1 741

—

3 090

–1 707

1 383

Expenditure

Expenditure

–646

—

–29

–350

–1 688

–6

–2 719

1 616

–1 103

Debt service

–166

—

—

—

–75

—

–241

91

–150

Total

–812

—

–29

–350

–1 763

–6

–2 960

1 707

–1 253

RESULTS

77

81

—

—

–22

–6

130

—

130

April to June 2014

Special funds

Generations Fund

Specified purpose accounts

Transfers (expenditures) related to the tax system

Non-budget- funded bodies

Health and education networks (1)

Total

Consolidation adjustments (2)

Total

Revenue

2 782

279

77

1 466

5 581

—

10 185

–5 487

4 698

Expenditure

Expenditure

–1 923

—

–77

–1 466

–5 229

–18

–8 713

5 218

–3 495

Debt service

–507

—

—

—

–243

—

–750

269

–481

Total

–2 430

—

–77

–1 466

–5 472

–18

–9 463

5 487

–3 976

RESULTS

352

279

—

—

109

–18

722

722

(1) The results of the networks are presented according to the modified equity accounting method.

(2) Consolidated adjustments include the elimination of program spending of the general fund.

The next monthly report, as at July 31, 2014, will be published on October 24, 2014.

For more information, contact the Direction des Communications of the Ministère des Finances du Québec at 418 528-7382.

The report is available on the Ministère des Finances du Québec website: www.finances.gouv.qc.ca.

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