Canada's provinces face fresh shocks ahead of 2026 budget season

A Desjardins analysis says most provinces are on firmer footing entering the 2026 budget season after Statistics Canada revised past GDP and some U.S. tariffs were limited under CUSMA; provincial fiscal updates begin with British Columbia and Alberta.

A Desjardins report finds the economic picture for Canada’s provinces is complex but generally stronger than expected as they approach the 2026 budget season. Randall Bartlett, deputy chief economist at Desjardins, noted recent developments have made forecasting more difficult. Statistics Canada’s historical GDP revisions raised earlier estimates for 2022 and 2023. Some U.S. tariffs have had less effect than feared because of exemptions under the Canada‑U.S.‑Mexico trade agreement. Key developments: - Desjardins analysts say provinces have shown more resilience than previously thought after Statistics Canada’s GDP revisions and limited impact from some U.S. tariffs, as Bartlett reported. - Provincial budget season begins with British Columbia this week and Alberta next week, with other provinces scheduled to publish fiscal updates in the coming months. - Ongoing policy steps and risks include the formal CUSMA review now under way and potential changes in global oil supply that could affect energy-producing provinces. Summary: Provincial finances generally look stronger than feared heading into the 2026 budget season, according to the Desjardins analysis. The immediate timetable sees B.C. and Alberta issuing fiscal updates soon, while the CUSMA review and global oil developments remain factors to watch. Undetermined at this time is how those risks will affect each province’s final fiscal outcomes.