Housing and health funding cliffs loom as federal budget nears: RBC
Provinces are increasingly calling for a permanently higher federal share, as rising health-care costs drove deteriorating 2026 budgets, the analysis said. After a recent one-year extension of mental health funding, health minister Marjorie Michel has designated the broader issue as one for 2027.
On both files, Leach said RBC will look for efficiencies and clear, lasting terms.
“We’ll be looking for Ottawa to push for efficiencies … and for eventual agreements ideally to delineate long-term commitments rather than funding patches that punt the issue,” she wrote.
Tight fiscal room
RBC estimates $57 billion in new five-year spending commitments since the spring update, led by the $36 billion corporate tax mega deduction. It said deficits could run more than $15 billion deeper by 2030-31 than the spring update projected.
The PBO now expects a $63.3 billion deficit in 2026-27 and a balanced operating budget by 2028-29, a year later than the government promised, the Canadian Press reported. The finance minister’s spokesperson said the PBO’s assumptions differ from the government’s.
