QUEBEC’S DEBT
COMPARISONS WITH OTHER GOVERNMENTS IN CANADA
Let’s compare Québec’s debt with the debt of the other governments in Canada,
by using the two main debt concepts. The headline number which is largely meaningless because it ignores the value of government financial and non financial assets and the net debt number based on first subtracting from the debt the value of financial assets and then subtracting from that first net debt number the value of non financial assets held by the government. The figure that is arrived at “debt representing accumulated deficits less accumulated surpluses expressed as a percentage of the GDP is the most meaningful statistic on government indebtedness particularly when we take into account to whom the debt is owed , how it is financed and the rate of interest it is financed at. Once we do this much if not all of the hysteria generated by the government’s barrage of propaganda about indebtedness should dissipate. Note Quebec’s debt to GDP calculated accurately in this way is 33 %, a significant figure but very far from a catastrophe.Its sister province Ontario has a ratio of 24.8 %. These deficits are largely the result of the the elevated unemployment and economic slowdown that Quebec has suffered from since the financial panic of 2008-09.Trying to eliminate them in a year or two as the Quebec government appears to be doing through austerity is simply bad policy.Note that B.C. at -0.6 %,Saskatchewan at -3.1% and Alberta at -17.6 % are all running surpluses due to the resources boom and their lower unemployment rates.
Gross debt and debt representing accumulated deficits as at March 31, 2013 (as a percentage of GDP)
Type of debt Qc FED ON NS MB NB NL PEI BC SK AB
Gross Debt 53.6% 49.0 44.0 38.7 36.8 32.9 31.8 29.8 25.9 15.1 6.0%
Debt representing 33.0% 33.1 24.8 22.1 10.2 8.9 13.1 18.2 -0.6 -3.1 -17.3%
accumulated deficits.
(1) A negative entry means that the government has an accumulated surplus.
Sources : Governments’ public accounts, Statistics Canada and Ministère des Finances du Québec.
haroldchorneyeconomist 