In analysis commissioned by the government even before it officially took power this week, economists Luc Godbout and Claude Montmarquette painted a grim portrait of Quebec's financial situation.
The report argues drastic measures are required to prevent the province from being downgraded by credit agencies.
The partial privatization of Hydro-Quebec and the liquor board, known as the SAQ, are only two of several major changes advocated by the experts to help get Quebec off the fiscal cliff.
Godbout and Montmarquette also suggest a wage freeze for public employees, increased service fees and a hike in the cost of Quebec's $7-a-day daycare.
Premier Philippe Couillard said Thursday he's still aiming to meet the previous Parti Quebecois government's objective of a $1.75-billion deficit in 2014-15 and a balanced budget the following year.
But he also said the province's deficit for the most recent fiscal year was $600 million more than projected.
He said the 2013-14 deficit clocked in at more than $3.1 billion instead of the $2.5 billion mentioned by the PQ before the election.
Couillard has already given notice his government will take steps to cut spending.
The government will try to cut administrative costs and impose a hiring freeze in the public sector, he said.