November 2 2022
“This is a remarkable story of economic recovery from the depths of the COVID-19 lockdown impacts. The next chapter will be written by the provinces as they decide what to do with their unexpected budget surpluses.” — David Macdonald, CCPA senior economist
Ottawa (02 Nov. 2022) — When the Canadian Centre for Policy Alternatives published its report on the spending of federal and provincial governments during the pandemic, it predicted that when the numbers were finally crunched, the provinces would be sitting on a pile of unused cash. Turns out, as CCPA points out in an updated report, they were right!
Provinces holding onto surpluses
In its report, Flush with cash: The provinces are richer than they think, the CCPA reveals that most provinces already have enough funds to pay for the social programs Canadians rely on to survive and thrive. David Macdonald, CCPA’s senior economist, shows that 9 out of 10 provinces have already experienced surpluses or will soon. 8 out of 10 of them are projecting that they will have better finances than before the pandemic started.
“While inflation has weighed heavily on Canadians, it has buoyed provincial finances,” says Macdonald. “The provinces now have the financial resources to properly index social assistance and other low-income transfers to inflation, fix broken long-term care systems and rebuild health care capacity.”
Macdonald continues: “There are no more financial excuses to avoid action on these fronts, only political ones.”
Better off today than pre-pandemic
The report compares, by province, government finances pre-pandemic to today. Highlights of his research results include the following:
- B.C.’s shift from a $322 million pre-pandemic deficit to a projected surplus of $1.3 billion for 2021-22;
- Alberta’s rebound from a deficit of $12.2 billion in 2019-20 to huge surpluses through 2025;
- Saskatchewan’s U-turn from pre-pandemic deficit to an over $1 billion surplus in 2022-23;
- Ontario’s rally from an $8.7 billion deficit in 2019-20 to a more than $2 billion surplus in 2021-22;
- New Brunswick’s projection, and recording, of a surplus each year of the pandemic.
Overall, the provinces initially projected a combined deficit of $48.5 billion this year (2022-23), but that initial deficit projection has been transformed into a $7.1 billion surplus. The surplus would have been $44 billion in 2022-23, but the provinces have already spent $37 billion of it.
Cries for austerity are ideology, not fact
“We appreciate the work of the CCPA delving deep into this government spending,” said Bert Blundon, President of the National Unionof Public and General Employees (NUPGE). “These findings once again tell us that the cry for austerity isn’t based on fact, but on ideology.”
“This is not the time for tax breaks for the wealthy and corporations,” said Bundon “What we need to see is government investment in long-term solutions to ensure our social programs are there for those who need them today, and decades into the future,” said Blundon.