Fiscal Stabilization Program

The federal government provides financial assistance through the Fiscal Stabilization program to provinces that are facing significant year-over-year declines in their revenues resulting from extraordinary economic downturns. 

Payments are determined by the Minister of Finance under a legislated formula. The program provides financial assistance to any province faced with a year-over-year decrease of more than 5 per cent in its non-resource revenues or of more than 50 per cent in its resource revenues, with adjustments for interactions between the revenue sources. A province could receive a maximum payment of $169 per person for the year 2020-21. The maximum payment is set to grow thereafter in line with Canadian economic growth per person and will not decline in the event of an economic decline.

The program is designed to address economic factors that are outside the control of provincial governments As such, revenues eligible for Fiscal Stabilization are adjusted to exclude the impact of provincial policy decisions (for example, changes in provincial tax rates or credits). Provinces must apply for payments under the program.

The federal government has provided payments totaling nearly $3.2 billion to the provinces through the Fiscal Stabilization program since it was created in 1967. The program has provided benefits at some point in time to every province in Canada.