Fiscal Prudence in the Limelight

As Ottawa seems to deliver a daily announcement of support for dealing with COVID and pandemic-related challenges, the provinces – particularly this one – have been less visible with handouts.

This was highlighted in a report from ScotiaBank’s economics branch which notes that Saskatchewan has announced the lowest levels of direct support among the provinces on a weighted basis. On average, provincial governments have ponied up 2.8-percent of their GDP in direct COVID-related support. Quebec leads the nation at almost five-percent, neatly twice the national average. Saskatchewan is at the other end of the scale less than one-quarter of one percent or one-tenth the national average.

The bank also looked at the capacity of the provinces to finance deficits and on this one, Saskatchewan fared quite well. Places like Ontario or Quebec which carried large public debts into the pandemic may well find themselves retooling their long-term objectives to manage the debt they are piling up right now.

The bank is also projecting the provincial economy will shrink nine-percent this year, third highest in the country on their rating and the deepest reduction of all the forecasts issued so far.