OTTAWA – Parliament’s budget watchdog says Saskatchewan and Manitoba face huge increases in their debt loads unless the provinces change their fiscal policies or Ottawa increases transfer payments.
Parliamentary budget officer Yves Giroux says Manitoba and Saskatchewan would each need to cut more than $2 billion from annual spending or increase taxes to keep their debt-to-GDP levels sustainable.
One alternative, he says, is higher annual increases in transfer payments from the federal government.
Giroux says all provinces face pressure from an aging population and increased health-care costs.
He says Manitoba and Saskatchewan will also take a hit because of fairly strong growth in their overall population, which will require increased social spending that will outpace federal transfers.
Giroux says British Columbia and Alberta are in much better positions, but B.C.’s economy could weaken enough to qualify for federal equalization payments sometime around 2060.