Provincial budgets across Canada are improving as the domestic economy recovers from the
COVID-19 pandemic, according to a new report from the Desjardins Group.
In the report, Desjardins said improving economic conditions have delivered a windfall for the
provinces. Every province in Canada saw fiscal conditions improve from previous estimates,
with New Brunswick and Nova Scotia expected to post surpluses this fiscal year.
However, there was a divergence in spending intentions, with Ontario, British Columbia, Nova
Scotia, and Prince Edward Island all planning to increase spending relative to gross domestic
product (GDP) compared to fiscal 2021-22, according to the report.
Though spending intentions are rising in those provinces, Desjardins said that Canada remains
more fiscally conservative than many other countries.
Canada currently has the lowest debt-to-GDP ratio among Group of Seven (G7) leading
industrialized nations. And while higher than before the pandemic, Canada’s total government
debt position continues to compare very well to other advanced economies, said Montreal-
based Desjardins.
At the end of April, Standard & Poor’s reaffirmed the Government of Canada’s AAA credit rating
with a stable outlook for this year.
