A Tale of Two Provinces: Spending Overruns in Ontario and Quebec Spell Fiscal Trouble

The simultaneous delivery of provincial budgets in Ontario and Quebec this spring provided a useful chance to see how governments of two key provinces faced with similar challenges are responding. The focus of budgets, and commentary on them, tends to be forward-looking. But before putting faith in the forward-looking elements, budget-watchers should ask what this year's numbers reveal about the reliability of budget commitments in the past. The short answer is that, in recent years, one-year-ahead budgetary spending forecasts have been much more reliable in Quebec than in Ontario. Over the past decade, both provinces have tended to spend more than projected. While Quebec’s record has improved to the point where its citizens can have some confidence that this year’s budget commitments are serious, Ontario continues to overrun its commitments by large margins. Ontarians are therefore entitled to take their government’s latest promise to control spending with a large grain of salt. Like all provinces, Ontario and Quebec are struggling with aging infrastructure and relentless pressure to spend on health. Canada’s two larges