Latest news with #RichardForbes
Calgary Herald
a day ago
- Business
- Calgary Herald
Alberta, Saskatchewan finances in best shape among provinces, says Conference Board
Article content Pressures from the trade war are expected to push every Canadian province into fiscal deficit this year, but their fortunes going forward could be radically different, according to a new report released by the Conference Board of Canada on Tuesday. Article content While all provinces currently face budget shortfalls brought on by pandemic debt and increased spending due to trade war uncertainty, Alberta and Saskatchewan are currently in the best fiscal position thanks to prudent debt management and revenue from the natural resources sector. Article content Article content Article content 'Alberta has a younger population and has a really strong foundation in the oil and gas sector, which helps to boost their royalty revenues,' said Richard Forbes, principal economist at the board. Article content Article content The report forecasts Alberta's fiscal position will improve from a $4.3 billion expected deficit in 2025-2026, to a surplus of $3.9 billion by the end of the decade. Article content Saskatchewan's shortfall is expected to improve as well, with the deficit shrinking from $373 million in 2025 to $172 million in 2026, with small budget surpluses for the remainder of the decade. Article content Forbes noted Saskatchewan and Alberta remain heavily reliant on resources and could face volatility. Article content On the flip side, the Atlantic provinces face tougher headwinds on the fiscal front, including declining population, lower investment and lower revenues. Article content None of the Atlantic provinces' deficits are expected to return to balance by the end of the decade, with Newfoundland and Labrador and New Brunswick in particular contending with aging populations. Article content Article content 'Demographics is a really big driver of government finances,' said Forbes. 'In eastern provinces and Quebec, their populations are bit more senior, and their median ages are higher.' Article content Article content Forbes said as people get older, they contribute less to tax revenues and generally spend less in the economy. In addition, as the population ages, the demand for healthcare services increases, a key area of spending for provinces. Article content British Columbia also currently faces a record-breaking deficit of $9.1 billion, which is 70 per cent higher than the record deficit it posted during the pandemic. In April, S&P Global Ratings downgraded the province's credit rating from AA to A+. The province's deficit is expected to remain elevated at $9.3 billion in 2029-30. Article content Forbes said there is no indication the province will come back to balance by the end of this decade, but cited potential revenue from the resources sector as a reason to remain optimistic.
Edmonton Journal
a day ago
- Business
- Edmonton Journal
Alberta, Saskatchewan finances in best shape among provinces, says Conference Board
Article content Pressures from the trade war are expected to push every Canadian province into fiscal deficit this year, but their fortunes going forward could be radically different, according to a new report released by the Conference Board of Canada on Tuesday. Article content While all provinces currently face budget shortfalls brought on by pandemic debt and increased spending due to trade war uncertainty, Alberta and Saskatchewan are currently in the best fiscal position thanks to prudent debt management and revenue from the natural resources sector. Article content Article content Article content 'Alberta has a younger population and has a really strong foundation in the oil and gas sector, which helps to boost their royalty revenues,' said Richard Forbes, principal economist at the board. Article content Article content The report forecasts Alberta's fiscal position will improve from a $4.3 billion expected deficit in 2025-2026, to a surplus of $3.9 billion by the end of the decade. Article content Saskatchewan's shortfall is expected to improve as well, with the deficit shrinking from $373 million in 2025 to $172 million in 2026, with small budget surpluses for the remainder of the decade. Article content Forbes noted Saskatchewan and Alberta remain heavily reliant on resources and could face volatility. Article content On the flip side, the Atlantic provinces face tougher headwinds on the fiscal front, including declining population, lower investment and lower revenues. Article content None of the Atlantic provinces' deficits are expected to return to balance by the end of the decade, with Newfoundland and Labrador and New Brunswick in particular contending with aging populations. Article content Article content 'Demographics is a really big driver of government finances,' said Forbes. 'In eastern provinces and Quebec, their populations are bit more senior, and their median ages are higher.' Article content Article content Forbes said as people get older, they contribute less to tax revenues and generally spend less in the economy. In addition, as the population ages, the demand for healthcare services increases, a key area of spending for provinces. Article content British Columbia also currently faces a record-breaking deficit of $9.1 billion, which is 70 per cent higher than the record deficit it posted during the pandemic. In April, S&P Global Ratings downgraded the province's credit rating from AA to A+. The province's deficit is expected to remain elevated at $9.3 billion in 2029-30. Article content Forbes said there is no indication the province will come back to balance by the end of this decade, but cited potential revenue from the resources sector as a reason to remain optimistic.
Yahoo
a day ago
- Business
- Yahoo
Alberta, Saskatchewan finances in best shape among provinces, says Conference Board
Pressures from the trade war are expected to push every Canadian province into fiscal deficit this year, but their fortunes going forward could be radically different, according to a new report released by the Conference Board of Canada on Tuesday. While all provinces currently face budget shortfalls brought on by pandemic debt and increased spending due to trade war uncertainty, Alberta and Saskatchewan are currently in the best fiscal position thanks to prudent debt management and revenue from the natural resources sector. 'Alberta has a younger population and has a really strong foundation in the oil and gas sector, which helps to boost their royalty revenues,' said Richard Forbes, chief economist at the board. The report forecasts Alberta's fiscal position will improve from a $4.3 billion expected deficit in 2025-2026, to a surplus of $3.9 billion by the end of the decade. Saskatchewan's shortfall is expected to improve as well, with the deficit shrinking from $373 million in 2025 to $172 million in 2026, with small budget surpluses for the remainder of the decade. Forbes noted Saskatchewan and Alberta remain heavily reliant on resources and could face volatility. On the flip side, the Atlantic provinces face tougher headwinds on the fiscal front, including declining population, lower investment and lower revenues. None of the Atlantic provinces' deficits are expected to return to balance by the end of the decade, with Newfoundland and Labrador and New Brunswick in particular contending with aging populations. 'Demographics is a really big driver of government finances,' said Forbes. 'In eastern provinces and Quebec, their populations are bit more senior, and their median ages are higher.' Forbes said as people get older, they contribute less to tax revenues and generally spend less in the economy. In addition, as the population ages, the demand for healthcare services increases, a key area of spending for provinces. British Columbia also currently faces a record-breaking deficit of $9.1 billion, which is 70 per cent higher than the record deficit it posted during the pandemic. In April, S&P Global Ratings downgraded the province's credit rating from AA to A+. The province's deficit is expected to remain elevated at $9.3 billion in 2029-30. Forbes said there is no indication the province will come back to balance by the end of this decade, but cited potential revenue from the resources sector as a reason to remain optimistic. 'I think in B.C., they have had such a run-up in debt, we don't see a clear path to balance for them,' said Forbes. 'But there is some upside to them, including the tech industry and their resources sector.' The report said potential revenue growth from newly launched LNG projects has the potential to offset royalty losses from the forestry sector, which has faced tough trade headwinds in recent years. Quebec's deficit in 2025 will hit a record $14.4 billion, before entering a modest surplus of $600 million by 2029-2030. This will be achieved through a deceleration in healthcare spending. Ontario's shortfall is also expected to improve by the end of the decade, going from a $13.5-billion deficit this year to a $3-billion surplus by 2029-2030, driven by improved revenue brought on by economic recovery starting in 2026. Ottawa's counter tariffs could cost Canadians $9 billion this year — or $550 per household, warns think tank These are the U.S. tariff rates the EU and other countries have agreed to as deadline for deal with Canada looms Overall, Forbes said he expects there will be cuts to the provincial public sector spending in most provinces, while spending will be maintained in education and healthcare. Forbes said the main risk to the forecast remains the uncertainty brought on by the trade war, which has the potential to worsen economic outcomes. • Email: jgowling@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
National Observer
a day ago
- Business
- National Observer
Provincial deficits will narrow in coming years despite trade war: report
Under pressure from the US trade war and a slowing economy, Canada's provinces are all expected to run fiscal deficits this year — but a Conference Board of Canada report predicts those deficits will narrow in the coming years. The report released Tuesday paints a picture of provinces struggling to balance their books. Not long after emerging from a pandemic that caused deficits to balloon, Canada's provinces are now staring down the barrel of a trade war. Most provinces have put up contingency funds in this year's budgets to support workers and critical industries through the tariff dispute. Many are also aligning with the federal government to push forward major infrastructure projects in the coming years, putting pressure on capital spending. Just as provinces are drawing down their coffers, they're also bracing for a hit to the economy. "When we see a slowdown in economic activity, that leads to less job creation, less spending, less incomes and less corporate profits," said Richard Forbes, principal economist at the Conference Board. "And these are … major drivers of provincial revenues." Also hampering provincial revenues is a slowdown in population growth as Ottawa tamps down on the flow of immigration. Many provinces are also facing demographic woes due to an aging population and baby boomers exiting the workforce — another drag on income tax revenue. A growing number of retirees also drives up demand for health-care spending. Forbes said that with the federal government's new immigration caps, population growth is likely to hit a wall in the coming years. That would limit any relief newcomers offer the labour market as older Canadians exit the workforce. The Conference Board report cites the example of Newfoundland and Labrador, which it says is expected to see its population shrink by 10,000 over the next five years. Quebec and most of the Maritimes are also expected to feel the "sting" of an aging population, the report said. Prince Edward Island, meanwhile, is experiencing the strongest population growth of any province in recent years. A 25-per cent increase in population over 10 years has helped to lower P.E.I.'s median age by 2.6 years, the report said. The Conference Board's forecast assumes the economy contracted in the second quarter of the year as tariffs and uncertainty sank manufacturing activity. The think tank predicts a modest return to growth through the rest of the year. At the tail end of the provinces' planning horizons, the Conference Board report sees governments reining in spending, which is expected to narrow those deficits by the end of the decade. The federal government has announced plans to balance the operating side of its budget over the next three years. Forbes said he expects to see similar trimming by the provinces in areas such as public administration. " Speaking broadly, of course, we are seeing provinces showing more prudence when it comes to their spending plans over the last couple of years," he said. Some provinces, including Saskatchewan and Alberta, are forecast to return to annual budget surpluses before 2030. The Conference Board says Canada's Prairie provinces are in relatively secure fiscal positions, thanks in part to younger demographics and some insulation from tariffs. Provinces like Alberta, Saskatchewan and Newfoundland and Labrador are expected to pivot their economies towards renewable energy in the years ahead, but Forbes noted that prospects for the oil and gas sector will continue to weigh heavily on the fiscal outlooks in those provinces. Ontario is also expected to see a balanced budget by the end of the decade. The Conference Board says accelerated infrastructure spending will drive up debt in the short term but planned moderation in health care and education expenditures will support deficit elimination. Quebec is in a "difficult position," the report says, with the province particularly penned in by weak demographic momentum, heightened economic uncertainty and growing demand for health-care and education spending. But the Conference Board says Quebec can find its way back to a modest surplus by 2029 if the province can deliver on spending restraint. British Columbia also faces a steep deficit, the Conference Board says, but a slowdown in spending and rising natural gas royalties are expected to help it climb out of that fiscal hole in the coming years. The federal government's infrastructure agenda could also be a boon for the province, the report notes. While New Brunswick is praised in the report for its displays of fiscal restraint in recent years, the Conference Board points to an aging population and the forestry industry's tariff exposure as serious revenue challenges. Nova Scotia is also expected to face challenges tied to a slowing economy, particularly as a lack of private sector investment and housing activity weigh on growth. Forbes said that while the Conference Board's forecast assumes trade uncertainty will diminish next year, the provinces' fiscal pictures could deteriorate further if Canada's tariff dispute with the United States persists. Part of the value of the Conference Board's exercise is that it puts all provincial budget plans through a uniform scenario, he said — unlike the various hypotheticals that underpin each individual province's spending plan. This report by The Canadian Press was first published July 29, 2025.
Cision Canada
a day ago
- Business
- Cision Canada
Provincial Finances Facing Headwinds Français
Near-term challenges but brighter longer-term outlook OTTAWA, ON, /CNW/ - The sluggish economy will weigh heavily on provincial government revenues across the country in 2025, as all provincial governments will run deficits this fiscal year, according to The Conference Board of Canada 's Provincial Fiscal Outlook, a new annual report from the organization. "Provinces will continue to feel the pinch from higher interest rates brought on by spending due to the pandemic and subsequent deficits," stated Richard Forbes, Principal Economist at The Conference Board of Canada. "Demographics are creating an additional challenge to regional economies with the combination of retirees and slower population growth. However, our fiscal outlook brightens over the next five years as governments are broadly planning to reduce spending and will benefit from stronger economic growth across the country." Demographics are the biggest concern for Newfoundland and Labrador 's fiscal outlook. The Conference Board of Canada forecasts the province's population will shrink by 10,000 residents over the next five years. Despite the demographic challenges, there are some positive developments for the region as oil and gas production is set to ramp up upon the completion of the Terra Nova Platform. Revenues are projected to rise 2.1 per cent in 2025-26 and by an annual average of 2.7 per cent in the following four fiscal years. Prince Edward Island has posted the strongest population gains of any province over the past 10 years, which is 25.0 per cent higher than it was in 2015. Tourism will provide a boost to revenues, particularly as more Canadians travel domestically in light of political tensions with the United States. The sector will also get a boost when the Charlottetown airport expansion is completed later this decade. Revenues, meanwhile, are forecast to rise 5.7 per cent in 2025-26 and by an annual average of 3.5 per cent between 2026-27 and 2029-30. Nova Scotia is estimating an $82-million surplus for the previous fiscal year compared to a $467 deficit projected just a year ago, putting the province in a good position to weather the economic headwinds of 2025. However, deficits are still expected over the medium term. Overall, revenues are expected to fall 2.3 per cent in 2025-26 before rising 2.6 per cent annually between 2026-27 and 2029-30. New Brunswick has been one of the most fiscally responsible provinces, posting a string of surpluses for the better part of the past decade. A major downside risk to our revenue outlook is from the province's forestry industry, which is exposed to tariffs from the United States. Revenues are anticipated to rise 3.0 per cent in 2025-26 – driven by stronger federal transfers – and 2.8 per cent annually through 2029-30. As Quebec moves toward restoring fiscal balance, it will be compelled to rein in spending growth despite rising pressures on public services. This fiscal restraint comes at a time when demand for healthcare is increasing, and the education sector is calling for greater investment. Healthcare spending, in particular, is expected to bear the brunt of the slowdown. Provincial revenues are forecast to rise by just 1.1 per cent in 2025, down from last year's 6.6 per cent growth. Revenues are then anticipated to rise by an annual average of 3.4 per cent between 2026 and 2029. Ontario 's fiscal outlook remains stable despite the province being highly exposed to U.S. trade tensions. Spending in Budget 2025 included an acceleration of infrastructure plans, bringing total infrastructure costs close to $100 billion over the next three years. This year, provincial revenues are forecast to decline by 0.1 per cent, marking a sharp reversal from last year's 6.0 per cent increase. The pullback reflects weaker economic growth and a deceleration in population gains. Overall, revenues are expected to rise by an annual average of 3.2 per cent between fiscal years 2026–27 and 2029–30. Manitoba 's fiscal outlook is steady despite rising debt costs. The province's 2025 budget hits many of the same marks as its 2024 budget, with a large focus placed on healthcare and education. This year's budget sets a new historic level of healthcare and education spending, but spending growth is slated to moderate considerably between 2026 and 2029. The Conference Board of Canada forecasts revenues to rise by a healthy 6.3 per cent this year, which is strong growth compared to the other provinces. Revenue growth will moderate between 2026-27 and 2029-30 but remain in relatively good shape, with average annual gains of 2.9 per cent. Despite lingering economic uncertainty, Saskatchewan 's revenues are expected to grow at a solid pace in the near term. Robust population growth in recent years and a low unemployment rate will continue to support strong growth in personal income tax revenues. On the energy front, oil royalties are projected to remain flat this fiscal year due to lower prices, but a rebound in oil markets, coupled with rising potash output from the Jansen project, will help drive stronger resource revenues in the years ahead. Overall, The Conference Board of Canada anticipates the province's budgetary revenues will increase by 5.7 per cent in fiscal year 2025–26 and average 3.3 per cent yearly until 2029–30. Alberta remains in a stronger financial position than most provinces. It continues to boast the lowest net debt-to-GDP ratio in Canada, giving it more room to absorb economic shocks. This strong foundation provides a cushion if oil prices remain low for a prolonged period or if external challenges undermine investment in the province's energy sector. Overall, revenues are expected to fall by 2.5 per cent in the current fiscal year, driven by lower royalties, before picking up to 3.6 per cent annual growth between 2026-27 and 2029-30. British Columbia 's finances have taken a steep turn over the past few years. In comparison with recent history, The Conference Board of Canada anticipates a slowdown in investment in the province, which weighs on our revenue outlook. However, there is promise with movement from the federal government on a plan to fast-track projects, particularly in Western Canada, which could kickstart business investment in the province. All told, revenues will rise a health 4.1 per cent in 2025-26, supported by increased royalties, and average 3.5 per cent annual growth in the following four fiscal years. The Conference Board of Canada is the country's leading independent research organization. Since 1954, The Conference Board of Canada has been providing research that supports evidence-based decision making to solve Canada's toughest problems. Follow The Conference Board of Canada on X @ConfBoardofCda. For more information on our impact, please visit the link here.
