Provincial and municipal finances

The provinces and territories are responsible for matters such as education, property and the administration of justice, hospitals and municipalities. For the territories, federal laws regulate the election of territorial councils, whose powers—including passing territorial laws—are conferred by the federal government. The provinces, in contrast, have the power to pass laws in a number of areas.

Municipalities, which are created under provincial laws, can make by-laws to deal with local matters such as snow removal, parking, noise, animal control, etc.

These responsibilities of course require funding—from taxes, user fees and transfers from other levels of government. Like the federal government, provincial, territorial and local governments are constantly trying to balance their budgets, sometimes recording a surplus while other times going into a deficit. Like the federal government, provincial, territorial and local finances are just as important to the country’s economic well-being. All levels of government provide Canadians with vital services.

In 2002/03, four of Canada's provincial and territorial governments had a total surplus of $1.6 billion; however, Alberta’s $1.5 billion surplus accounted for nearly all of that. In total, the provincial and territorial governments posted a deficit of $6.3 billion in 2002/03. At the municipal level (which includes school boards), Alberta also had the largest surplus ($0.7 billion) for a third year in a row; Ontario’s municipalities recorded a surplus of $0.4 billion. Across Canada, the local government surplus was $0.7 billion.