Parliamentary Budget Officer Yves Giroux waits to appear before the Commons finance committee on Parliament Hill in Ottawa, Tuesday March 10, 2020. THE CANADIAN PRESS/Adrian Wyld

Parliamentary Budget Officer Yves Giroux waits to appear before the Commons finance committee on Parliament Hill in Ottawa, Tuesday March 10, 2020. THE CANADIAN PRESS/Adrian Wyld

PBO says reformed fiscal stabilization program to cost Ottawa $4.5 billion

OTTAWA — Reforms to a federal support program for provinces will nearly triple the cost to Ottawa next year, with the price tag projected to be about $4.5 billion, says Canada’s parliamentary budget officer.

Yves Giroux says the government’s fiscal stabilization program, which transfers cash to provinces that experience steep year-over-year revenue drops, will increase by $2.9 billion in fiscal 2021-22.

Prime Minister Justin Trudeau announced a major change to the program in the government’s fall economic update.

The revenue-insurance plan will lift funding capped for more than three decades at $60 per resident to $170, indexing the payment ceiling to Canada’s rate of GDP growth per person.

Alberta Premier Jason Kenney has said the overhaul does not go far enough, calling it a “slap in the face,” since even major declines in resource revenue might not trigger the fiscal stabilization, while a five per cent drop in non-resource revenue will.

The program only kicks in for resource income when decreases exceed 50 per cent.

The beefed-up federal support comes as provinces wobble under the strain of record deficits and revenue shortfalls due to the COVID-19 pandemic and related restrictions.

Several provincial ministers expressed disappointment the Liberals didn’t eliminate the funding cap as they had asked.

Alberta Finance Minister Travis Toews said last month his province expected to receive $750 million under the new limits, a figure that falls well short of what Alberta could use.

Newfoundland and Labrador’s Finance Minister Siobhan Coady has said that her province’s projected 45 per cent drop in offshore oil revenues this year would not allow it to qualify for help through the stabilization fund.

Provinces are also allowed to apply for an interest-free loan under the program, though none has requested one since 1987, the budget office says.

The program dates back to 1967, brought in under Lester Pearson’s Liberal government to help cushion the blow to provinces going through economic rough patches.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A candlelight vigil will be held in Red Deer on Thursday to honour the 350-plus people killed in the Easter bombing attack in Sri Lanka. Contributed photo
Candlelight vigil planned for deaths linked to Olymel COVID-19 outbreak

A candlelight vigil is being planned for those who died due to… Continue reading

Red Deer Rebels forward Jaxsen Wiebe battles Calgary Hitmen forward Cael Zimmerman for a loose puck when the two teams squared off in February last season. (Photo by BYRON HACKETT/Advocate Staff)
Calgary Hitmen shutout Red Deer Rebels

Rebels name centre Jayden Grubbe team captain ahead of Friday’s game

Traffic will be delayed on 40th Avenue and 19th Street until the end of February. (Advocate file photo).
Traffic delays expected downtown this weekend

Red Deer drivers will be delayed in the downtown area of the… Continue reading

COVID
Red Deer down to 313 active cases of COVID-19

Alberta reports an additional 411 COVID-19 cases

Bryson, six, and Mara, eight, play with puppies from Dogs With Wings Saturday. (Photo by Sean McIntosh/Advocate staff)
WATCH: Dogs With Wings introduces Red Deer program

A program that trains puppies to be certified service, autism, facility and… Continue reading

Harley Hay
Harley Hay: Just don’t call it cod liver oil

Many people swear that a daily dose of various vitamins is an… Continue reading

Email editor@auburn-reporter.com
Letter: Preserving green spaces in Red Deer

The Advocate published an article Feb. 11 about Sunnybrook residents concerned about… Continue reading

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Los Angeles Kings head coach Darryl Sutter, top, is shown on the bench after NHL action against the Clagary Flames  in Calgary, Alta., Thursday April 9, 2015. Sutter says he has "unfinished business" as he returns to coach the Calgary Flames. THE CANADIAN PRESS/Larry MacDougal
Darryl Sutter has ‘unfinished business’ in return to Calgary Flames

Darryl Sutter has ‘unfinished business’ in return to Calgary Flames

Walter Gretzky talks to people while at the funeral of Celtic music legend John Allan Cameron at St. Isaac Jogues Church in Pickering, Ont., Monday, Nov. 27, 2006. THE CANADIAN PRESS/Nathan Denette
‘A legend in his own right’: Hockey world pays tribute to the late Walter Gretzky

‘A legend in his own right’: Hockey world pays tribute to the late Walter Gretzky

Jordan Spieth follows his approach shot to the ninth green during the second round of the Arnold Palmer Invitational golf tournament Friday, March 5, 2021, in Orlando, Fla. (AP Photo/John Raoux)
Conners builds 1-shot lead at Bay Hill as McIlroy lurks

Conners builds 1-shot lead at Bay Hill as McIlroy lurks

Team Canada skip Brad Gushue makes a shot as he plays Team Ontario at the Brier in Calgary, Alta., Friday, March 5, 2021.THE CANADIAN PRESS/Jeff McIntosh
Brier in the Bubble: Defending champion Gushue beats Epping in opening draw

Brier in the Bubble: Defending champion Gushue beats Epping in opening draw

Switzerland's celebrates after the final match at the Women's Curling World Championship in Silkeborg Denmark Sunday March 24. 2019. The 2021 world women's curling championship is back on the curling calendar. THE CANADIAN PRESS/AP, Ritzau Scanpix - Henning Bagger
Women’s world curling championship back on calendar, added to Calgary bubble

Women’s world curling championship back on calendar, added to Calgary bubble

Most Read