Report Reinforces Premiers’ Call for Federal Transfers to Meet Costs

Canada’s premiers have reiterated their call for more federal contribution to the provinces in light of a new report from the Conference Board of Canada, which has predicted that the country’s aging population is bound to overload provincial costs while federal surpluses soar. The report, entitled “A Difficult Road Ahead: Canada’s Economic and Fiscal Prospects,” was commissioned last year by the premiers.

According to the report, Canada’s aging population will be a cause for weaker economic growth and less revenue for provincial governments hence it will not be able to fully fund programs and services. Consequently, the increment in the number of seniors will also trigger an increase in demand for health care, which will create additional costs. Therefore, the report claims that it will create a difficult situation for provinces to balance their books in the long term. Whereas on the other hand, the Conference Board of Canada calculated that the federal government will be able to improve its financial status and reach an estimated surplus of $109 billion by the year 2034-35.

The country’s premiers meeting in Charlottetown this week are anticipated to use this report to reinforce their long-voiced concerns over the need for greater health and fiscal transfers to the provinces. Ghiz mentioned on Thursday afternoon that “last year in Prince Edward Island, our health care budget grew by approximately $30-million. How much did the federal government contribute out of that $30-million? They contributed approximately $8-million.” It was added that “even though they may be still contributing to increases, it’s not keeping up to the pace on how much our health budgets are going.”

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