Five Takeaways from Mid-Year Updates in Canada’s Provinces - What to Expect for Provincial Finances During Next Year’s Recession and Beyond

In this note, we discuss the five takeaways from the latest round of provincial updates and what to expect for government finances with the Canadian economy likely to go into recession next year. Another round of revenue windfalls drove further fiscal improvements in this year’s round of mid-year updates, but provinces must be prudent and targeted with new spending and revenue measures going forward. Inflation looks to have peaked, and new fiscal room should be devoted to weathering the coming economic storm and addressing long-run demographic pressures on government finances.