Atlantic demographic pressures demand a rethink of government spending: CFIB

A demographic crisis is already descending on the Atlantic region and, according to a new report by the Canadian Federation of Independent Business (CFIB), fundamental changes are needed to the way provincial governments in Atlantic Canada currently spend money and provide services.

Erin McGrath-Gaudet, the report’s author and CFIB’s director for P.E.I. and intergovernmental policy, said the Island has seen “significant improvement” in attracting immigrants over the past decade, putting the population in a better position than other Atlantic provinces.

“But we are not yet seeing longer term strategies in any of the Atlantic provinces to really offset the impact population aging will have on government programs and finances.”

With older populations, governments should expect significant increases in age-related spending demands, especially in health care. This challenge will be compounded by the fact there will be fewer workers and residents to pay the increased tax load.

“Atlantic Canada is already a highly-taxed region and P.E.I. is no exception,” McGrath-Gaudet said. “We cannot expect an even smaller tax base to be able to pay more and more to cover government spending. Governments must get their spending in check, not just to balance budgets in the short-term, but to be able to provide priority services for the next 30 years.”

While the report recommends governments work to restrain and prioritize their spending, it also urges regional governments to work together on the provision of services, as is often seen in health care in the region.

Jordi Morgan, CFIB’s viepresident for Atlantic Canada, said with few differences, all four Atlantic provinces are facing the same trends.