Ottawa’s Temporary Migrant Cut Could Dramatically Change the Provinces’ Fiscal Destinies

Statistics Canada’s latest demographic projections could significantly alter the outlook for economic growth and government budgets across the provinces.

Ottawa’s plan to dramatically cut the non-permanent resident (NPR) population suggests we could soon see Canadian headcount gains fall to a rate previously seen only during the worst of the pandemic when borders were closed. That’s a stunning result following the skyrocketing population growth of 2022–24.

The NPR cut could significantly weigh down GDP and tax revenues in all provinces, with the biggest drags likely to come in Ontario and BC. By contrast, Alberta’s smaller reliance on NPRs leaves it less vulnerable to the proposed federal policy.

Theoretically, spending cuts could outstrip the forecast revenue losses and limit the impact on provincial budget balances, but the reality for fiscal policymakers is far more complicated.

All of this makes fiscal planning exceptionally challenging for provincial governments at this juncture. We hope that the coming months will bring more policy clarity.