{"id":590,"date":"2025-07-29T11:56:17","date_gmt":"2025-07-29T11:56:17","guid":{"rendered":"https:\/\/www.worldpumpnews.com\/?p=590"},"modified":"2025-07-29T11:56:17","modified_gmt":"2025-07-29T11:56:17","slug":"provinces-deficits-could-shrink-in-coming-years-despite-trade-war-report-national","status":"publish","type":"post","link":"https:\/\/www.worldpumpnews.com\/?p=590","title":{"rendered":"Provinces\u2019 deficits could shrink in coming years despite trade war: report – National"},"content":{"rendered":"

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Under pressure from the U.S. trade war and a slowing economy, Canada\u2019s provinces are all expected to run fiscal deficits this year \u2014 but a Conference Board of Canada report predicts those deficits will narrow in the coming years.<\/p>\n

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The report released Tuesday paints a picture of provinces struggling to balance their books.<\/p>\n

Not long after emerging from a pandemic that caused deficits to balloon, Canada\u2019s provinces are now staring down the barrel of a trade war.<\/p>\n

Most provinces have put up contingency funds in this year\u2019s budgets to support workers and critical industries through the tariff dispute.<\/p>\n

Many are also aligning with the federal government to push forward major infrastructure projects in the coming years, putting pressure on capital spending.<\/p>\n

Just as provinces are drawing down their coffers, they\u2019re also bracing for a hit to the economy.<\/p>\n

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\u201cWhen we see a slowdown in economic activity, that leads to less job creation, less spending, less incomes and less corporate profits,\u201d said Richard Forbes, principal economist at the Conference Board.<\/p>\n

\u201cAnd these are \u2026 major drivers of provincial revenues.\u201d<\/p>\n

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Also hampering provincial revenues is a slowdown in population growth as Ottawa tamps down on the flow of immigration.<\/p>\n

Many provinces are also facing demographic woes due to an aging population and baby boomers exiting the workforce \u2014 another drag on income tax revenue. A growing number of retirees also drives up demand for health-care spending.<\/p>\n

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Forbes said that with the federal government\u2019s 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.<\/p>\n

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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 \u201csting\u201d of an aging population, the report said.<\/p>\n

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.\u2019s median age by 2.6 years, the report said.<\/p>\n

The Conference Board\u2019s 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.<\/p>\n

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