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.