ANOTHER STUDY CONFIRMS PROVINCES NEED MORE FEDERAL FUNDING

The gap between the federal government's surplus finances and the provinces' and territories' substantial deficit finances will continue to widen in the future, according to a study released today.

Conducted by the Conference Board of Canada, the study says that the provinces will face chronic deficits of around $11 billion through 2019-20, while the federal government will see its surplus rise steadily, reaching $78.9 billion by the end of that period.

"Our revenues and the revenues of most other provinces will simply not keep pace with our expenditures," Finance Minister Harry Van Mulligen said. "It's a problem we're facing now, and we'll continue to deal with in the future, as this study confirms. And as we've pointed out repeatedly to the federal government, and now so has the Conference Board of Canada, the biggest expense is health care. We need more help from the federal government."

The study predicts that health care costs will grow at approximately 5.2 per cent each year over the forecast period, driving total provincial and territorial healthcare costs from $72.5 billion in 2002-03 to more than $170 billion by 2019-20.

"We have been saying for some time now that the federal government has the resources to assist provinces in meeting this challenge," Van Mulligen said. " Now we have an independent study that validates this point. Our lobbying for more health care funding and a strengthened Equalization program should not be falling on deaf ears in Ottawa."

"The federal government must work to address this fiscal imbalance to enable the provinces and territories to maintain health care and the many other vital social programs that benefit all Canadians," Van Mulligen added.

The study, entitled Fiscal Prospects for the Federal and Provincial/Territorial Governments, is an update of the Conference Board of Canada's 2002 study and is available at either Finance's website or www.councilofthefederation.ca.

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For More Information, Contact:

Debbie Clark Finance Regina Phone: (306)787-6605