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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:
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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.
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To fill this gap, provinces could raise taxes, forcing taxpayers to pay between $804 and $985 more per person in 2024/25.
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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, and be sure to share it with your friends and family.
Sincerely,
Niels Veldhuis
President
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