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Atlantic governments need rethink on spending: CFIB

A demographic crisis is descending on the Atlantic region, says a new report by the Canadian Federation of Independent Business (CFIB).

The business group says fundamental changes are needed to the way provincial governments in Atlantic Canada currently spend money and provide services.

“Prince Edward Island has seen significant improvement in attracting immigrants over the past decade which puts our population in a much 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,” explained Erin McGrath-Gaudet, the report’s author and CFIB’s director for P.E.I. and intergovernmental policy. “

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, she said.

“Atlantic Canada is already a highly-taxed region and P.E.I. is no exception. 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,” said McGrath-Gaudet.

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.

“With few differences, all four Atlantic provinces are facing the same trends. Given our close proximity to each other, small population, and history of working together, it is wise to explore working together to ensure we are providing important services in the most efficient way possible,” said Jordi Morgan, CFIB’s vice-president for Atlantic Canada.

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