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A Difficult Road Ahead: Canada’s Economic and Fiscal Prospects

The Conference Board of Canada, 88 pages, August 28, 2014
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Provincial and territorial governments face tenuous financial positions. This report looks over the next 20 years as large deficits and an aging population force many provinces to make difficult choices.

Document Highlights

Canada's provincial and territorial governments are in a tenuous position. A Difficult Road Ahead: Canada's Economic and Fiscal Prospects provides an estimate of potential economic growth in Canada over the longer term. It also provides a detailed modelling of health care spending that accounts for demographic changes, trends in technology and access to services, and trends in cost drivers in these sectors, over a long-term forecast horizon.

Collectively, Canada's provinces and territories are expected to record a combined budget deficit of $16.1 billion in fiscal year 2013–14. According to this report, the provinces will have to make substantial cuts to spending outside of health and education in order to balance their books. Even after the provinces return to balance, they will have to retain tight control on spending growth, the result of slower expected revenue growth due to an aging population.

Table of Contents

Executive Summary

Chapter 1—Introduction

Chapter 2—Long-Term Economic Outlook

  • Demographic Assumptions
  • Potential Output

Chapter 3—Demand for Public Services and Canada’s Fiscal Prospects

  • Forecasting Health Information
  • Education
  • Public Accounts Projections

Chapter 4—Spending Scenarios and Results

  • Federal Government Outlook—From Deficit to Surplus
  • Provincial Government Outlook
  • Maintaining the Status Quo on Health
  • The Low Health Scenario
  • What’s Possible

Chapter 5—The Economic Impact of Changes to Old Age Security

Chapter 6—Conclusion

Appendix A—Bibliography

Appendix B—Detailed Results of the Analysis

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