The Quebec government is slashing plans for the Carré Saint-Laurent — a major real-estate development that the former Parti Québécois government had promised would help revitalize downtown Montreal's entertainment district.

The cut is the latest in a series of austerity measures implemented by Premier Philippe Couillard's Liberals, as they struggle to balance the province's budget by 2015-2016.

The $160 million Carré Saint-Laurent was announced in December.

It was set to be located in the heart of downtown Montreal’s Quartier des Spectacles, bordered by Ste-Catherine Street, St-Laurent Boulevard, and Clark Street.

carré saint laurent

The ten-storey complex, pictured on the right side of the Carré Saint-Laurent facility, would have housed 700 government employees. (Société de développement Angus)

But the Liberal government said it re-evaluated the development project, and found it was an unjustifiable use of public funds.

Montreal Mayor Denis Coderre said it wasn't up to him to comment on the province's decision, adding that it's their prerogative to do as they wish with public funds. 

"They have some difficult choices to make," he said.

Coderre said he would be looking at other options for revitalizing that part of town, which has gained a reputation for being a seedy area. 

"What I know is that we need to revitalize that corner," he said.

"I’m going to sit with all the stakeholders and we’ll see."

The former PQ government had already signed a 25-year lease for office space within the development, which would have included a 10-storey, 16,500 square metre facility to house four government ministries and 700 employees.

The minister responsible for Montreal, Robert Poëti, said rent in the new building would have cost the government 45 per cent more than they are currently paying for office space.

“At the economic time we’re living ... it’s not the right idea to do that right now.”

The development project was also supposed to include commercial space and a 12-storey condo tower.

With files from Canadian Press