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Finances of the Nation: The Impact of COVID-19 on Provincial and Local Government Finances

Author

Listed:
  • Ayaka Behro

    (Finances of the Nation)

  • Michael Smart

    (University of Toronto)

Abstract

In this article, Ayaka Behro and Michael Smart explore the impact of COVID-19 on provincial government finances. While spending rose in all provinces in the 2020-21 fiscal year, so did revenues in many provinces, cushioning the impact on deficits. While grants and income tax revenues rose in many provinces, largely owing to federal policies, consumption tax and natural resource revenues fell sharply. Comparing provinces, higher COVID-19 caseloads were associated with higher health spending and lower consumption tax revenues. These findings suggest that COVID-19 has had a more damaging impact on provincial finances than initial forecasts had suggested.

Suggested Citation

  • Ayaka Behro & Michael Smart, 2022. "Finances of the Nation: The Impact of COVID-19 on Provincial and Local Government Finances," Canadian Tax Journal, Canadian Tax Foundation, vol. 70(3), pages 643-657.
    • Handle: RePEc:ctf:journl:v:70:y:2022:i:3:p:643-657
    DOI: https://doi.org/10.32721/ctj.2022.70.3.fon
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