(September 10 – 17:00 ET) – Alberta will be the only province to stand
ahead of the pack in the coming year, Dominion Bond Rating Service said
today as it released its annual review of the federal and provincial
governments.
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Only Alberta will post a DBRS-adjusted surplus in 1999-2000, down
from five provinces last year. DBRS also forecast a $1 billion
increase in the cumulative provincial deficit to $6.1 billion. The
reasons: B.C.s fiscal situation, assorted provincial tax cuts and
increased government spending. Yet it notes that, due to better-
than-expected economies and commodity markets, most governments
will be ahead of where they expected to be when they released
their budgets.
DBRS cites as a primary risk the possibility that governments will
increase spending rather than cutting taxes or deficits with their
surpluses. It would prefer tax and debt reduction because such
moves offer more flexibility when conditions worsen.
In the short-term at least DBRS says it doesn’t expect governments to
revive high taxes or runaway spending. It notes that recent increases
have been concentrated in health care and the overall economy remains
strong.
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