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Dear John,
What happens when federal funding for provincial responsibilities is reduced or even eliminated?
A new Fraser Institute study warns that if the federal government reduces provincial transfers - similar to cuts made in the mid-1990s - provinces could face a $19.4 billion funding shortfall just to maintain current spending levels.
Key findings:
If Ottawa cut the Canada Health Transfer and Canada Social Transfer by 15% in 2024/25, provinces would have needed to cover the gap themselves. To fill this gap, provinces could raise taxes, forcing taxpayers to pay between $804 and $985 more per person in 2024/25. The shortfall burden of $19.4 billion would have hit Ontario the hardest at $7.5 billion, followed by Quebec at $4.8 billion, Alberta at $2.1 billion, British Columbia at $2.0 billion, and all other provinces combined at $3.0 billion.
Federal priorities change, programs shift, and suddenly, provinces are left holding the bag. This isn’t just a hypothetical; history shows federal priorities can shift, and provinces must be prepared.
Read the full study here [[link removed]], and be sure to share it with your friends and family.
Sincerely,
Niels Veldhuis
President
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