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

Exhibit 99.4

2004-2005
Results
and
Quarterly Presentation of
Financial Transactions
as at September 30, 2005

ISSN 0706-3164

Legal deposit
Bibliothèque nationale du Québec, 2005

Publication date: December 2005

Website: http://www.finances.gouv.qc.ca

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

2004-2005 Results and Quarterly Presentation of Financial Transactions as at September 30, 2005 ¹

Section 1
Fiscal year 2004-2005
Results of consolidated financial transactions

Section 2
Fiscal year 2005-2006
Forecasts of consolidated financial transactions

Appendix 1
Tables of 2004-2005 and 2005-2006
consolidated financial transactions

Appendix 2
Presentation of federal transfers
using accrual accounting

1 The accounting practices are described in the Québec government’s consolidated financial statements.

3

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Section 1

Fiscal year 2004-2005

Results of consolidated financial transactions

Results of consolidated financial transactions for 2004-2005	5
Budgetary transactions of the Consolidated Revenue Fund	6
Net results of consolidated organizations	7
Consolidated non-budgetary transactions	7
Consolidated financing transactions	7

4

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Results of consolidated financial transactions for 2004-2005

The actual results for 2004-2005 show a budgetary surplus of $9 million before a provision of $673 million for pay equity. Including this provision, the budgetary deficit amounts to $664 million.

Taking this deficit into account, the accumulated surplus according to the Balanced Budget Act, which stood at $819 million as at March 31, 2004, amounts to $155 million as at March 31, 2005.

TABLE 1

GOUVERNEMENT DU QUÉBEC
SUMMARY OF 2004-2005 CONSOLIDATED FINANCIAL TRANSACTIONS¹
(millions of dollars)

	April 21, 2005		Actual
	Budget		results		Change
Budgetary transactions of the Consolidated Revenue Fund
Own-source revenue		44 161		44 381		220
Federal transfers		9 228		9 229		1
Total revenue		53 389		53 610		221
Program spending before provision for pay equity		- 46 742		- 46 983		- 241
Debt service		- 6 868		- 6 853		15
Total expenditure		- 53 610		- 53 836		- 226
Net results of consolidated organizations		221		235		14
Budget balance before provision for pay equity		0		9		9
Provision for pay equity (covering the period 2001-2002 to 2004-2005)		—		- 673		- 673
Budget balance including provision for pay equity		0		- 664		- 664
Non-budgetary transactions
Investments, loans and advances		- 1 075		- 979		96
Capital expenditures		- 919		- 1 083		- 164
Retirement plans		2 174		2 134		- 40
Other accounts		- 592		174		766
Non-budgetary requirements		- 412		246		658
Net financial requirements		- 412		- 418		- 6
Financing transactions
Change in cash position		- 813		- 831		- 18
Change in direct debt		5 359		5 378		19
Retirement plans sinking fund		- 4 134		- 4 129		5
Total financing of transactions		412		418		6

1 According to the budgetary and financial structure in effect for fiscal year 2005-2006.

5

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Budgetary transactions of the Consolidated Revenue Fund

Revenues of the Consolidated Revenue Fund are adjusted upwards by $221 million compared with the preliminary results published with the Budget Speech last April. Expenditures are increased by $226 million.

Revenues

The increase in revenues results chiefly from three factors. First, additional revenues were collected from corporate income taxes because corporate profits were stronger than expected. In addition, royalties on natural resources are adjusted upwards. Lastly, revenues from government enterprises for 2004-2005 have been raised by $53 million, in particular because of higher earnings at Hydro-Québec and Loto-Québec.

TABLE 2

ITEMS CONTRIBUTING TO THE CHANGE IN REVENUE OF THE CONSOLIDATED REVENUE FUND FOR FISCAL YEAR 2004-2005
(millions of dollars)

Own-source revenue			220
- Excluding government enterprises		167
- Corporate taxes	76
- Natural resources	62
- Other	29
- Government enterprises		53
Federal transfers			1
Total change			221

Expenditure

The target set for program spending in the 2004-2005 Budget has been met, apart from two adjustments made on closing the financial statements for doubtful accounts at the ministère du Revenu and the pay equity issue.

Accordingly, the upward adjustment of $241 million to program spending as shown in Table 1 arises from an increase of $269 million in spending relating to the allowance for doubtful accounts. This increase is made necessary in view of the results of the last estimate carried out for this purpose by the ministère du Revenu when the financial statements were closed.

Moreover, the decision handed down by the Superior Court on January 9, 2004 established that the government, as an employer, was subject to the general regime of the Pay Equity Act. Under this legislation, the government and labour organizations must evaluate jobs in order to correct any pay disparities noted for predominantly female job categories, as of November 21, 2001. The provision of $673 million, covering the period from November 21, 2001 to March 31, 2005, corresponds to the best estimate to date of the cost of pay equity, given the state

6

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

of progress of the ongoing work. Payments relating to pay equity can be charged against this provision once the parties have completed their work.

Net results of consolidated organizations

The net results of consolidated organizations have improved by $14 million compared with what was forecast in last April’s budget.

Consolidated non-budgetary transactions

Funding requirements for investments, loans and advances have been adjusted downward by $96 million, chiefly because of dispositions of investments by certain consolidated organizations.

Funding requirements for capital expenditures have been revised to $1 083 million, up $164 million. This change is attributable mainly to greater-than-expected investments in the road network and the extension of the Montréal metro to the city of Laval.

Funding requirements for other non-budgetary accounts are adjusted downward by $766 million. This decrease is mainly due to the provision for pay equity, which generated an account payable and therefore did not require an outflow of funds as at March 31, 2005. The other accounts include cash and bills on hand, outstanding cheques, accounts receivable and accounts payable.

On the whole, the adjustments to budgetary and non-budgetary transactions have produced an increase of $6 million in net financial requirements compared with the preliminary results of the April 21, 2005 Budget Speech.

Consolidated financing transactions

Turning to financing transactions, the actual results show an increase of $6 million compared with what was forecast in the April 21, 2005 Budget.

7

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Section 2

Fiscal year 2005-2006

Forecasts of consolidated financial transactions

Forecasts of consolidated financial transactions for 2005-2006	9
Budgetary transactions of the Consolidated Revenue Fund	10
Net results of consolidated organizations	12
Consolidated non-budgetary transactions	12
Consolidated financing transactions	12
Budgetary results as at September 30, 2005	14

8

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Forecasts of consolidated financial transactions for 2005-2006

The objective of a balanced budget for fiscal year 2005-2006, as set in the April 21, 2005 Budget, is maintained. The upward adjustment to federal transfer revenues and net results of consolidated organizations offsets the almost equivalent increase in the amount of program spending.

It should be noted that the adjusted forecasts reflect the government’s decision to act on the recommendation of the Auditor General of Québec to adopt accrual accounting for federal transfers. Previously, these revenues were shown according to the cash accounting method. The change to this accounting practice is the main reason for the upward revision of $204 million in federal transfers.

TABLE 3

GOUVERNEMENT DU QUÉBEC
SUMMARY OF 2005-2006 CONSOLIDATED FINANCIAL TRANSACTIONS
(millions of dollars)

	April 21, 2005		Revised
	Budget		forecasts		Change
Budgetary transactions of the Consolidated Revenue Fund
Own-source revenue		45 528		45 521		- 7
Federal transfers		9 607		9 811		204
Total revenue		55 135		55 332		197
Program spending		- 48 407		- 48 765		- 358
Debt service		- 6 995		- 6 947		48
Total expenditure		- 55 402		- 55 712		- 310
Net results of consolidated organizations		267		380		113
Budget balance		0		0		0
Non-budgetary transactions
Investments, loans and advances		- 1 517		- 1 341		176
Capital expenditures		- 1 242		- 1 242		—
Retirement plans		2 016		2 016		—
Other accounts		309		266		- 43
Non-budgetary requirements		- 434		- 301		133
Net financial requirements		- 434		- 301		133
Financing transactions
Change in cash position		2 661		2 528		- 133
Change in direct debt		- 1 072		428		1 500
Retirement plans sinking fund		- 1 155		- 2 655		- 1 500
Total financing of transactions		434		301		- 133

9

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Budgetary transactions of the Consolidated Revenue Fund

The revenue forecast for the Consolidated Revenue Fund for 2005-2006 is adjusted to $55 332 million. Expenditure is adjusted to $55 712 million.

Changes in Québec’s economy since the 2005-2006 Budget

Québec’s economy has stood up well to the pressure caused by the rise in the price of energy and the strength of the Canadian dollar. Accordingly, little adjustment is required to economic growth compared to the forecasts of the 2005-2006 Budget. Last April, the ministère des Finances expected economic growth of 2.4% in 2005 and 2.6% in 2006. The adjusted data indicate that the economy will grow by 2.2% in 2005 and that, for 2006, growth should amount to 2.4%.

This good performance of Québec’s economy, in a difficult international context, is largely attributable to the continued high level of confidence of consumers who, encouraged by the stimulus of tax cuts, lower prices of many imported goods and attractive credit conditions, increased their spending faster than expected.

Turning to the external sector, the export recovery that began in 2004 has continued. However, the significant rise in the Canadian dollar continued to favour purchases of foreign goods.

TABLE 4

CHANGE IN ECONOMIC OUTLOOK

	2005		2006
Real GDP (%)		2.2		2.4
- adjustment1		- 0.2		- 0.2
Nominal GDP (%)		4.4		4.0
- adjustment1		- 0.2		0.2
Price of a barrel of crude oil (US$)		58.4		62.8
- adjustment1		12.7		21.8
Canadian dollar (US cents)		82.0		84.6
- adjustment1		1.0		7.3

1 Compared to the 2005-2006 Budget.

10

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Revenue

The forecasts of the April 21, 2005 Budget Speech set own-source revenue at $45 528 million and federal transfers at $9 607 million for fiscal year 2005-2006. Overall, revenue of the Consolidated Revenue Fund is adjusted upward by $197 million. Accordingly, own-source revenue is adjusted slightly downward by $7 million, while federal transfers are revised upward by $204 million.

TABLE 5

ITEMS CONTRIBUTING TO THE CHANGE IN REVENUE OF THE CONSOLIDATED REVENUE FUND FOR FISCAL YEAR 2005-2006
(millions of dollars)

Own-source revenue			- 7
- Excluding government enterprises		169
- Personal income tax	75
- Health Services Fund	50
- Corporate taxes	125
- Consumption taxes	- 81
- Government enterprises		- 176
Federal transfers			204
Total change			197

The revenue forecasts for personal income tax and contributions to the Health Services Fund are raised by $75 million and $50 million respectively. These adjustments arise from stronger-than-expected growth in wages and salaries.

The upward adjustment of $125 million to corporate taxes results mainly from tax payable in 2004 that was greater than expected, generating in particular an increase in tax instalments payable in 2005-2006.

Revenue from consumption taxes is $81 million below what was anticipated at the time of the 2005-2006 Budget. This decline mainly reflects revenue that was less than forecast regarding the tobacco tax, because of the significant decline in volumes taxed. However, these losses are partially offset by an upward adjustment to sales tax revenue stemming from stronger-than-expected consumer spending.

Lastly, revenue of government enterprises is revised downward by $176 million mainly because the gain of $133 million realized by Investissement Québec for the shares it has held since December 2003 in Québec Cartier Mining Company must be recorded in the net results of consolidated organizations. In the last budget, it will be recalled that an amount had already been anticipated under asset sales in revenue of government enterprises.

Federal transfers are adjusted upward by $204 million compared to the amount forecast in last April’s Budget. As indicated above, this increase results chiefly

11

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

from moving from cash accounting to accrual accounting. Appendix 2 provides a detailed explanation of the change made to the accounting for transfer revenues from the federal government.

Expenditure

The forecast set in the last budget of $48 407 million for program spending is adjusted upward to $48 765 million, an increase of $358 million. Accordingly, the expenditure relating to the allowance for doubtful accounts of the ministère du Revenu is raised by $258 million. This increase reflects the recurrence of the adjustment made to this allowance at the close of fiscal year 2004-2005.

Moreover, while the overruns identified in the monitoring of program spending in the fall are in the process of being absorbed, an additional expenditure of $100 million is expected under the public sector retirement plans. This amount reflects the impact of the new estimate of the value of the government actuarial obligations carried out in recent months. This new estimate also produces an increase of $90 million in interest under the retirement plans, bringing the increase in the cost of the retirement plans arising from this new estimate to close to $200 million.

Despite the increase in interest under the retirement plans, forecast service on the total debt is adjusted downward by $48 million. This adjustment reflects the better-than-expected performance of the Canadian dollar compared to the various currencies that make up the debt.

Net results of consolidated organizations

The upward adjustment of $113 million to net results of consolidated organizations is attributable mainly to the gain of $133 million realized by Investissement Québec on the sale of its investment in Québec Cartier Mining Company.

Consolidated non-budgetary transactions

Forecast non-budgetary requirements have been adjusted downward by $133 million. This change stems from a reduction of $176 million in requirements for funds for investments, loans and advances, resulting from the downward revision of an equivalent amount to revenues of enterprises, partially offset by a decline of $43 million in sources of funds of other non-budgetary accounts.

Consolidated financing transactions

With respect to financing transactions, the forecast is adjusted downward by $133 million compared to the last budget further to an equivalent reduction in the change in cash position.

12

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

The upward revision to the change in direct debt is attributable to new borrowings that are higher than forecast. These borrowings were used to make deposits during the fiscal year of $1 500 million to the Retirement Plans Sinking Fund that were initially stipulated for 2006-2007.

13

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Budgetary results as at September 30, 2005

Consolidated Revenue Fund revenue

Own-source revenue is up 3.8% for the first six months of 2005-2006 compared with the corresponding period in 2004-2005, as opposed to an increase of 2.6% forecast for the year as a whole. This divergence is attributable to the coming impact of fiscal measures on corporate taxes whose effect will be to reduce tax revenues during the second half of 2005-2006. It also stems from non-recurring increases in the earnings of certain government enterprises, in particular Hydro-Québec which enjoyed favourable export market conditions due to the warm temperatures registered in the summer in neighbouring markets.

Moreover, accrual accounting for federal transfers has been adopted on a forward-looking basis. For that reason, it is not possible to compare the growth rate of federal transfers after six months in 2005-2006 in relation to the same period in 2004-2005.

Consolidated Revenue Fund expenditure

Turning to program spending, the results recorded as at September 30, 2005 show an increase of 2.0% compared to the first six months of 2004-2005, i.e. a growth rate below the rate of 3.6% forecast on an annual basis excluding the increase in spending concerning the retirement plans. This difference is attributable chiefly to the fact that the program spending objective for 2005-2006 incorporates certain provisions that, in particular, will be used to fund the costs of pay equity from now to the end of the fiscal year.

TABLE 6

CHANGE IN PROGRAM SPENDING SINCE THE 2005-2006 BUDGET
(millions of dollars)

	2004-2005			2005-2006
Program spending objective in the 2005-2006 Budget		46 742			48 407
% change		3.2			3.6
Adjustments other than to the retirement plans		241			258
		46 983			48 665
% change		3.7			3.6
Impact of the new actuarial estimate relating to the retirement plans		—			100
Adjusted program spending		46 983	1		48 765
% change		3.7			3.8

1 Program spending before the provision for pay equity.

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2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Debt service is adjusted downward by 0.6% in the first half of fiscal year 2005-2006 compared to the same period in 2004-2005, while an increase of 1.4% is expected for the year as a whole. This difference is attributable mainly to capital gains realized by the sinking fund for Québec government borrowings. The revenues of this fund are applied against debt service. These gains are essentially attributable to the decline in long-term interest rates early in the fiscal year. However, the rise in these rates since then will partially offset these gains by the end of the year.

Jean Houde
Deputy Minister of Finance

15

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Appendix 1

Tables of 2004-2005 and 2005-2006
consolidated financial transactions

Summary of consolidated financial transactions	17
Consolidated Revenue Fund revenue	18
Consolidated Revenue Fund expenditure	19
Consolidated non-budgetary transactions	20
Consolidated financing transactions	21
New borrowings as at September 30, 2005	22

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2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

TABLE 1.1

GOUVERNEMENT DU QUÉBEC

SUMMARY OF CONSOLIDATED FINANCIAL TRANSACTIONS (Unaudited results)

(millions of dollars)

	2004-2005		2005-2006							Results as at September 30
							Annual
	Actual		Budget		Revised		change						Change
	results 1		Speech		forecasts		%		2004-2005		2005-2006		%
Budgetary transactions of the Consolidated Revenue Fund
Own-source revenue		44 381		45 528		45 521		2,6		20 832		21 625		3,8
Federal transfers2		9 229		9 607		9 811		n. a.		3 129		4 779		n. a.
Total revenue		53 610		55 135		55 332		n. a.		23 961		26 404		n. a.
Program spending before provision for pay equity		- 46 983		- 48 407		- 48 765		3,8		- 23 991		- 24 479		2,0
Debt service		- 6 853		- 6 995		- 6 947		1,4		- 3 377		- 3 357		- 0,6
Total expenditure		- 53 836		- 55 402		- 55 712		3,5		- 27 368		- 27 836		1,7
Net results of consolidated organizations		235		267		380		61,7		117		258		—
Budget balance before provision for pay equity		9		0		0		n. a.		- 3 290		- 1 174		n. a.
Provision for pay equity (covering the period 2001-2002 to 2004-2005)		- 673		—		��		—		—		—		—
Budget balance including provision for pay equity		- 664		0		0		n. a.		- 3 290		- 1 174		n. a.
Non-budgetary transactions
Investments, loans and advances		- 979		- 1 517		- 1 341				- 1 159		- 1 047
Capital expenditures		- 1 083		- 1 242		- 1 242				- 353		- 485
Retirement plans		2 134		2 016		2 016				1 178		1 163
Other accounts		174		309		266				- 1 184		- 1 322
Non-budgetary requirements		246		- 434		- 301		—		- 1 518		- 1 691		11,4
Net financial requirements		- 418		- 434		- 301		- 28,0		- 4 808		- 2 865		- 40,4
Financing transactions
Change in cash position		- 831		2 661		2 528				3 242		1 391
Change in direct debt		5 378		- 1 072		428				2 647		2 052
Retirement plans sinking fund		- 4 129		- 1 155		- 2 655				- 1 081		- 578
Total financing of transactions		418		434		301		- 28,0		4 808		2 865		- 40,4

Note:	A negative entry indicates a financial requirement and a positive entry, a source of financing. For the change in cash position, a negative entry indicates an increase and a positive entry, a decrease.
1	The actual results for 2004-2005 include a provision of $673 million for pay equity.
2	Accrual accounting has been implemented for federal transfers on a forward-looking basis. For this reason, it is impossible to compare the growth rate of federal transfers after one half of 2005-2006 with the same period in 2004-2005.

17

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

TABLE 1.2

GOUVERNEMENT DU QUÉBEC

CONSOLIDATED REVENUE FUND REVENUE
(millions of dollars) (Unaudited results)

	2004-2005		2005-2006						Results as at September 30
							Annual
	Actual		Budget		Revised		change							Change
Revenue by source	results		Speech		forecasts		%		2004-2005			2005-2006		%
Own-source revenue
Income and property taxes
Personal income tax		16 324		16 691		16 766		2,7		7 856			7 696		- 2,0
Contributions to Health Services Fund		4 874		5 031		5 081		4,2		2 412			2 533		5,0
Corporate taxes		4 253		4 302		4 427		4,1		1 671			2 008		20,2
		25 451		26 024		26 274		3,2		11 939			12 237		2,5
											��
Consumption taxes
Retail sales		9 241		9 715		9 745		5,5		4 556			4 912		7,8
Fuel		1 711		1 715		1 705		- 0,4		802			844		5,2
Tobacco		901		912		811		- 10,0		502			442		- 12,0
Alcoholic beverages1		403		419		419		4,0		201			206		2,5
		12 256		12 761		12 680		3,5		6 061			6 404		5,7
Duties and permits
Motor vehicles		713		737		737		3,4		295			309		4,7
Natural resources		238		126		126		- 47,1		86			80		- 7,0
Other1		209		201		201		- 3,8		90			102		13,3
		1 160		1 064		1 064		- 8,3		471			491		4,2
Miscellaneous
Sales of goods and services		371		397		397		7,0		104			114		9,6
Interest		355		390		390		9,9		216			256		18,5
Fines, forfeitures and recoveries		442		439		439		- 0,7		221			248		12,2
		1 168		1 226		1 226		5,0		541			618		14,2
Revenue from government enterprises
Société des alcools du Québec		546		682		667		22,2		276			308		11,6
Loto-Québec		1 511		1 536		1 536		1,7		774			778		0,5
Hydro-Québec		2 405		2 125		2 125		- 11,6		709			793		11,8
Other		- 116		110		- 51		- 56,0		61			- 4		—
		4 346		4 453		4 277		- 1,6		1 820			1 875		3,0
Total own-source revenue		44 381		45 528		45 521		2,6		20 832			21 625		3,8
Federal transfers2
Equalization		5 221		4 667		4 798		n. a.		1 850			2 399		n. a.
Health transfers		2 422		3 060		3 114		n. a.		918			1 548		n. a.
Transfers for postsecondary education and other social programs		926		962		993		n. a.		443			491		n. a.
Other programs		660		918		906		n. a.		- 82			341		n. a.
Total federal transfers		9 229		9 607		9 811		n. a.		3 129			4 779		n. a.
Total revenue		53 610		55 135		55 332		n. a.		23 961			26 404		n. a.

1

Because of the elimination of the specific and ad valorem duties on alcoholic beverages in September 2004 and their replacement with a tax at a higher rate, the income associated with the tax on alcoholic beverages is included in the consumption tax category and shown under a separate heading. In 2004-2005, $20 million of duties arising from the sale of alcohol permits is recorded under other duties and permits, while an additional $57 million of the duties and permits category is reclassified under the new heading of alcoholic beverages.

2

Accrual accounting has been implemented for federal transfers on a forward-looking basis. For this reason, it is impossible to compare the growth rate of federal transfers after one half of 2005-2006 with the same period in 2004-2005.

18

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

TABLE 1.3

GOUVERNEMENT DU QUÉBEC

CONSOLIDATED REVENUE FUND EXPENDITURE
(millions of dollars) (Unaudited results)

	2004-2005		2005-2006								Results as at September 30
									Annual
	Actual		Budget			Revised			change						Change
Departments and agencies	results 1		Speech			forecasts			%		2004-2005		2005-2006		%
Program spending
Assemblée nationale		93		94			94			1,1		44		44		—
Personnes désignées par l’Assemblée nationale		55		56			56			1,8		37		26		- 29,7
Affaires municipales et Régions		1 628		1 776			1 776			9,1		1 070		1 016		- 5,0
Agriculture, Pêcheries et Alimentation		662		653			653			- 1,4		431		455		5,6
Conseil du trésor et Administration gouvernementale		455		808	2		908	2, 3		99,6		186		176		- 5,4
Conseil exécutif		215		251	2		251	2		16,7		97		99		2,1
Culture et Communications		525		536			536			2,1		334		326		- 2,4
Développement durable, Environnement et Parcs		198		178			178			- 10,1		99		93		- 6,1
Développement économique, Innovation et Exportation		550		576	2		576	2		4,7		300		299		- 0,3
Éducation, Loisir et Sport		11 770		12 202			12 202			3,7		6 263		6 354		1,5
Emploi et Solidarité sociale		4 068		4 012	2		4 012	2		- 1,4		2 037		1 950		- 4,3
Famille, Aînés et Condition féminine		1 527		1 634			1 634			7,0		778		831		6,8
Finances (excluding debt service)		112		214	2		214	2		91,1		45		44		- 2,2
Immigration et Communautés culturelles		121		99			99			- 18,2		54		51		- 5,6
Justice		632		612			612			- 3,2		300		313		4,3
Relations internationales		103		100			100			- 2,9		51		53		3,9
Ressources naturelles et Faune		376		391			391			4,0		216		243		12,5
Revenu		906		603			861			- 5,0		233		239		2,6
Santé et Services sociaux		20 111		20 862			20 862			3,7		10 069		10 423		3,5
Sécurité publique		944		906			906			- 4,0		436		434		- 0,5
Services gouvernementaux		41		54			54			31,7		16		19		18,8
Tourisme		145		139			139			- 4,1		102		120		17,6
Transports		1 670		1 808			1 808			8,3		749		838		11,9
Travail		76		64			64			- 15,8		44		33		- 25,0
Anticipated lapsed appropriations		—		- 150			- 150			—		—		—		—
Appropriations carried over in 2006-2007		—		- 71			- 71			—		—		—		—
Total program spending		46 983		48 407			48 765			3,8		23 991		24 479		2,0
Debt service
Direct debt service		4 067		4 319			4 204			3,4		2 025		1 964		- 3,0
Interest ascribed to retirement plans		2 786		2 676			2 743			- 1,5		1 352		1 393		3,0
Total debt service		6 853		6 995			6 947			1,4		3 377		3 357		- 0,6
Total expenditure		53 836		55 402			55 712			3,5		27 368		27 836		1,7

1	Program spending before the provision for pay equity.
2	These amounts contain provisions enabling transfers of appropriations to other departments during the fiscal year ending March 31, 2006, in particular to fund the costs of pay equity from now to the end of the year.
3	Including an additional expenditure of $100 million reflecting the impact of a new estimate of the value of the actuarial obligations of the retirement plans.

19

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

TABLE 1.4

GOUVERNEMENT DU QUÉBEC

CONSOLIDATED NON-BUDGETARY TRANSACTIONS
(millions of dollars) (Unaudited results)

	2004-2005		2005-2006						Results as at September 30
							Annual
	Actual		Budget		Revised		change						Change
	results		Speech		forecasts		$		2004-2005		2005-2006		$
Investments, loans and advances
Consolidated Revenue Fund
Government enterprises		- 863		- 1 343		- 1 167		- 304		- 1 142		- 1 072		70
Individuals, corporations and others		69		- 14		- 14		- 83		- 182		- 259		- 77
Municipalities and municipal bodies		2		2		2		—		—		—		—
		- 792		- 1 355		- 1 179		- 387		- 1 324		- 1 331		- 7
Consolidated organizations		- 187		- 162		- 162		25		165		284		119
Total investments, loans and advances		- 979		- 1 517		- 1 341		- 362		- 1 159		- 1 047		112
Capital expenditures
Consolidated Revenue Fund
Net investments		- 178		- 319		- 319		- 141		- 48		- 47		1
Amortization		217		221		221		4		104		104		—
		39		- 98		- 98		- 137		56		57		1
Consolidated organizations		- 1 122		- 1 144		- 1 144		- 22		- 409		- 542		- 133
Total capital expenditures		- 1 083		- 1 242		- 1 242		- 159		- 353		- 485		- 132
Retirement plans
Employer and employee contributions		5 412		5 508		5 508		96		2 677		2 818		141
Benefits and other payments		- 3 278		- 3 492		- 3 492		- 214		- 1 499		- 1 655		- 156
Total retirement plans		2 134		2 016		2 016		- 118		1 178		1 163		- 15
Other accounts
Consolidated Revenue Fund		56		204		141		85		- 1 249		- 1 862		- 613
Consolidated organizations		118		105		125		7		65		540		475
Total other accounts		174		309		266		92		- 1 184		- 1 322		- 138
Total non-budgetary requirements		246		- 434		- 301		- 547		- 1 518		- 1 691		- 173

Note: A negative entry indicates a financial requirement and a positive entry, a source of financing.

20

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

TABLE 1.5

GOUVERNEMENT DU QUÉBEC

CONSOLIDATED FINANCING TRANSACTIONS
(millions of dollars) (Unaudited results)

	2004-2005		2005-2006						Results as at September 30
							Annual
	Actual		Budget		Revised		change						Change
	results		Speech		forecasts		$		2004-2005		2005-2006		$
Change in cash position
Consolidated Revenue Fund		- 814		2 661		2 661		3 475		4 426		2 581		- 1 845
Consolidated organizations		- 17				- 133		- 116		- 1 184		- 1 190		- 6
Total change in cash position		- 831		2 661		2 528		3 359		3 242		1 391		- 1 851
Change in direct debt
Consolidated Revenue Fund
New borrowings
In Canadian dollar		7 125								3 460		1 998		- 1 462
In US dollar		1 022								1 022		1 267		245
In Euro		2 381								—		—		—
In Australian dollar		—								—		258		258
Change in the debt resulting from
currency swap transactions		- 312								228		- 971		- 1 199
		10 216		3 930		5 430		- 4 786		4 710		2 552		- 2 158
Repayment of borrowings
In Canadian dollar		- 1 994								- 787		- 760		27
In US dollar		- 1 019								- 406		—		406
In Euro		- 1 310								- 1 228		—		1 228
In Yen		- 477								- 95		- 228		- 133
In Swedish crowns		- 89								- 89		—		89
Change in the debt resulting from currency swap transactions		- 915								- 614		52		666
Contributions to the sinking fund for Québec government borrowings		- 7								- 90		- 214		- 124
		- 5 811		- 5 936		- 5 936		- 125		- 3 309		- 1 150		2 159
		4 405		- 2 006		- 506		- 4 911		1 401		1 402		1
Consolidated organizations
New borrowings		2 188		1 565		1 565		- 623		1 436		720		- 716
Repayment of borrowings		- 1 215		- 631		- 631		584		- 190		- 70		120
		973		934		934		- 39		1 246		650		- 596
Total change in direct debt		5 378		- 1 072		428		- 4 950		2 647		2 052		- 595
Retirement plans sinking fund		- 4 129		- 1 155		- 2 655		1 474		- 1 081		- 578		503
Total financing of transactions		418		434		301		- 117		4 808		2 865		- 1 943

Note: A negative entry indicates a financial requirement and a positive entry, a source of financing. For the change in cash position, a negative entry indicates an increase and a positive entry, a decrease.

21

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

TABLE 1.6

GOUVERNEMENT DU QUÉBEC

NEW BORROWINGS AS AT SEPTEMBER 30, 2005
(millions of dollars)

										Face value		Amount
			Interest							in millions		received in
	Date of	Date of	rate			Price to		Yield to		of monetary		Canadian
	issue	maturity	(%) 1			investor		investor 2		units		dollars 3
Consolidated Revenue Fund
In Canadian dollar										CAN$
Treasury bills	Various	Various	—4			Various		Various			—	—		5
Québec savings products
Savings bonds	Various	Various	Various				100,000	Various			27		27
Transitory investments	Various	Various	Various				100,000	Various			4		4
Investment savings plan	Various	Various	Various				100,000	Various			27		27
Bonds	Various	Various	Various			Various		Various			246		245
											304		303
Bonds
Bonds	2005-06-03	2015-12-01		5,000			104,546		4,453		500		523
Bonds	2005-07-05	2036-12-01		5,750			114,148		4,866		327		373
Bonds	2005-08-25	2015-12-01		5,000			105,542		4,325		414		437
Immigrant Investor Program	Various	Various	Various			Various		Various			310		258
Canada Pension Plan Investment Fund	Various	Various	Various				100,000	Various			4		4
											1 555		1 595
Medium-term notes
On the European market	2005-05-18	2015-05-18	4,650		6		99,745		4,629		100		100
											1 959		1 998
In US dollar										US$
Bonds	2005-05-26	2015-05-26		4,600			99,913		4,611		1 000		1 267
In Australian dollar											A$
Medium-term notes	2005-07-15	2015-07-15		5,750			99,438		5,825		284		258
Change in the debt resulting from currency swap transactions													- 971
													2 552
Consolidated organizations													720
Total new borrowings													3 272

1	Interest payable semi-annually except if another frequency is indicated in a note.
2	Based on semi-annual interest payments.
3	Borrowings in foreign currencies are shown in the Canadian equivalent of the amount received, using the exchange rate of the Bank of Canada at noon on the date of issue.
4	“Zero-coupon” type borrowing.
5	Represents the change in the amount outstanding during the year.
6	Interest is payable annually.

22

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

Appendix 2

Presentation of federal transfers using accrual accounting

The government is making a significant improvement to the accounting practices used to present federal transfer revenues. In so doing, it is responding favourably to a recommendation by the Auditor General of Québec.

Under the accounting practices in effect up to now, federal transfer revenues to Québec were shown on a cash accounting basis. This method consists in recording the revenues in the year in which they are paid by the federal government. By adopting accrual accounting, federal transfer revenues will henceforth be recorded in the year to which they relate, regardless of when the amounts are actually paid to Québec by the federal government.

Under accrual accounting, the smoothing mechanisms for payments obtained in the past no longer have an effect on federal transfer revenues, since the refunds stipulated in the future refer to prior years. Note that over the last four fiscal years, the Québec government obtained from the federal government the implementation of such mechanisms to limit the impact, on the government’s budgetary planning, of significant fluctuations in equalization payments. These payment reductions were spread over a certain number of years.

TABLE 2.1

EQUALIZATION PAYMENT SMOOTHING MECHANISMS OBTAINED FROM THE FEDERAL GOVERNMENT OVER THE LAST FOUR FISCAL YEARS
(millions of dollars)

Context	Smoothing period	Amount
Change in methodology for property taxes in 2002-2003	Five years as of 2003-2004		656
Significant decrease in equalization in 2003-2004	Ten years as of 2006-2007		1219
Significant decrease in equalization in 2004-2005	Ten years as of 2006-2007		1158
Total			3033

The payments arising from the adjustments for prior years also cease to have an impact on revenues shown according to the accrual method. Overall, the move to accrual accounting has a positive impact of $219 million on Québec’s revenue from federal transfers in 2005-2006.

23

2004-2005 Results and
Presentation of Financial Transactions
as at September 30, 2005

TABLE 2.2

IMPACT ON THE QUÉBEC GOVERNMENT’S REVENUE FROM FEDERAL TRANSFERS OF MOVING TO ACCRUAL ACCOUNTING AS OF 2005-2006
(millions of dollars)

Equalization
- Cancellation of the negative impact relating to the smoothing mechanism concerning changes in methodology for property taxes	131
Transfers for health
- Cancellation of negative adjustments relating to prior years	62
Transfers for post-secondary education and other social programs
- Cancellation of negative adjustments relating to prior years	35
Other programs
- Cancellation of positive adjustments relating to prior years	- 9
Total	219

This expected rise in federal transfer revenue is, however, accompanied by the creation of an account payable that increases the Québec government’s net debt by $3 228 million as at April 1, 2005.

TABLE 2.3

IMPACT ON THE QUÉBEC GOVERNMENT’S NET DEBT AS AT APRIL 1, 2005 OF MOVING TO ACCRUAL ACCOUNTING AS OF 2005-2006
(millions of dollars)

Non-refunded portion of the smoothing mechanism obtained in 2002-2003	394
Non-refunded portion of the smoothing mechanism obtained in 2003-2004	1219
Non-refunded portion of the smoothing mechanism obtained in 2004-2005	1158
Refund of the tax transfer for youth allowances	299
Other adjustments relating to prior years	158
Total (account payable)	3228

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