The 2006-07 budget tabled by Quebec Finance Minister Michel Audet on yesterday increases spending by $2.5 billion, compared with the previous fiscal year.

Health care and education are both getting increases, and the budget also makes debt repayment a higher priority than tax cuts.

Audet’s balanced budget projects spending of $55.8 billion.

Working Quebecers will see a little more in their pockets this year. Income taxes will fall by $288 million through an increase in the basic deduction for workers to $1,000 from $500.

Audet said the province’s debt – at $118 billion, the highest per capita in Canada – is too high.

“That’s why we have presented a plan to control it,” using a new debt repayment fund called the Generations Fund, he said.

The fund will use profits from Hydro Quebec and royalties from damming rivers.

Health care will account for two out of every three new dollars that the government will spend. That amounts to an extra $1.3 billion, an increase of 6.3%, which will bring total health spending to $22.1 billion.

The government is setting aside $660 million more for education, which represents an increase of 5.4%. The education budget is now $13 billion.

Of that money, $100 million will go toward meeting the needs of special students, to start teaching English in Grade 1 and to construct a new building at Concordia University in Montreal.