The Office of the Parliamentary Budget Officer (PBO) recently released their Fiscal Sustainability Report for 2018 at the end of September. This report outlines the PBO’s current “assessment of the sustainability of government finances over the long term for the federal government, subnational governments and public pension plans.”

A cursory review of the report’s mentions of education-related concerns yields the following insight:

“Education and social spending by subnational governments are targeted to younger age groups in the population—children ages 5 to 24 for education and the working-age population aged 15 to 65 for social spending.

Over the long term, as the share of these age groups in the population declines, subnational spending on these programs is projected to grow more slowly than their economies. That said, long-term savings from education and social spending are insufficient to offset increases in their health care costs.

Given that the federal CST envelope is limited to annual growth of 3 per cent, we project that the federal CST contributions to provincial and territorial education and social spending will decline over time from 7.7 per cent in 2017 to 5.3 per cent by 2092 at the national level.”

Similarly, a view focused purely on British Columbia grants the reader with the following highlights:

“Over the long term, primary deficits, combined with rising public debt charges, lead to excessive debt accumulation in most provinces and the Territories. Except for Quebec and British Columbia, net debt in all provinces and territories is projected to exceed 100 per cent of GDP by 2092.

Except for Quebec, current fiscal policies across provinces and territories are not sustainable over the long term. Based on our estimates, the amount of policy actions required to achieve fiscal sustainability varies considerably, from just 0.1 per cent of provincial GDP in British Columbia up to 12.0 per cent of territorial GDP for the Territories.

Our qualitative assessment that current subnational fiscal policies are not sustainable over the long term is essentially unchanged across the alternative demographic, economic and fiscal policy assumptions considered. Our sustainability assessment is only reversed under alternative scenarios for one province, British Columbia, which is close to being sustainable under current policies (0.1 per cent of GDP).”

Columnist Andrew Coyne of the National Post weighed in on the report shortly after its release, pointing out the overall troublesome long-term outlook. He began his column stating that “At some point in the next 20 to 30 years, on current trends, one or more of the provinces is likely to default on its debts.” He quickly went on to add that while there these are not foregone conclusions, they nonetheless paint a picture of caution for the future. As unlikely as it is that these trends will stay the same as outside influences evolve, they still pose important questions for where we see Canada in the years ahead.

Coyne elaborated on the ‘grimmer’ aspects of the trends outlined within the report, stressing that “It’s true that fiscal policy in many of the provinces has been irresponsible, gusting to reckless. It is unforgivable that, 10 years into a recovery, six of the 10 should still be running deficits, even modest ones — as if the business cycle, and the likelihood of a recession that would plunge them all back heavily into the red, had been abolished.”

British Columbia appears on the healthier side of the conversation, but the national consequences will undoubtedly leave their mark across all provinces. Coyne also points out the impact of Canada’s ageing population, and how it will continue to increase the drain on provincial finances through our current health care arrangements. What this means for funding of other departments outside of health in the future is, unfortunately, not positive, as provincial resources are significantly more finite than those found on the national level. Coyne illustrates this narrative by surmising that “Where not so long ago there were five people of working age for every retiree, that ratio will soon fall to just over 2 to 1.”

Again, the projections are darker outside of BC, but pointing out the flaws of our neighbours does not absolve us of concern. The final notes in Coyne’s article call for thoughts of prevention and change and draw attention to the notion that tomorrow’s issues require today’s consideration.

As we continue to champion the needs of students and our public education system, it is important to be aware of these national and provincial trends. What this all specifically means for boards of education and public education dollars in BC remains to be seen, but it is becoming apparent that our current course is unsustainable, and a change of direction likely looms in the not so distant future. While we might not be able to do everything we want, we can likely do almost anything we want. Establishing priorities will continue to be a significant part of every trustee’s role going forward, as well as advocacy.