The Globe and Mail reports in its Friday edition that under pressure to support their economies against tariffs and geopolitical shocks, provincial governments face tightening fiscal room and mounting debt burdens that could restrict their room to manoeuvre. The Globe's Jason Kirby writes that with budget season largely wrapped up, the combined deficits of the provinces are projected to widen by $6.5-billion to $47-billion, or 1.4 per cent of gross domestic product, with Ontario, British Columbia and Alberta accounting for much of the red ink, according to a TD Economics analysis of provincial budgets for fiscal 2026-27. The added borrowing needed to make up for that shortfall is set to push provincial debt to 31.5 per cent of GDP by fiscal 2027-28. That would be nearly on par with the highs reached in the wake of the Great Recession. Several provinces have sketched out plans to return to balanced budgets, notably Ontario, Quebec, Saskatchewan and Manitoba. But while the first two of those provinces account for most of a slowdown in across-the-board program spending, they also face twin pressures of aging populations and trade war threats to key industries that could require them to act to prop up their economies.
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