Atlantic Provinces’ Spending Growing Faster Than Own Source Revenues
The Fiscal Monitor says that budget balances in the region are getting worse, describing the trend of higher spending outpacing revenues as “unsustainable”.
Nova Scotia and PEI are forecasting several years of deficits the monitor says, with only New Brunswick looking at a surplus for 2023/2024. Even so, all four Atlantic provinces are expected to have a worse fiscal balance by the end of the year. This is due to several factors including increased spending caused by a combination of an aging population and an influx of international and interprovincial migrants who are putting more demands on infrastructure.
“A greater percentage of our population is getting older, and also putting some pressure on the healthcare system…. And we’re having better population growth,” says report author, senior economist Lana Asaff. “It can help give a boost to tax revenues, which is good, but it puts some pressure on funding, in terms of additional infrastructure. I’m thinking of transportation needs as well as housing.”
“That’s kind of like two sides of the coin. We definitely want to be bringing more people in to help out with our labour needs….they can help out with a lot of those major projects that are going on right now like the transition to the clean economy. There are going to be some pressures on our systems due to population growth, but also a great opportunity.”
The monitor does not break down the spending in each sector, but Asaff notes that Nova Scotia’s decision to prioritize and fix healthcare may be making it more difficult for that province to balance the money going in and the money coming out. [Continue Reading]