News Feed Item

The Fraser Institute: Quebec Carries Largest Debt Load in Canada, Forcing Taxpayers to Pay Billions in Interest Payments

MONTREAL, QUEBEC -- (Marketwired) -- 03/11/14 -- Quebec has the largest government debt relative to the size of its economy of any Canadian province, and a series of essays released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank, breaks down how Quebec got to this point and where it might go from here.

Quebec's net direct debt (the accumulated borrowing by the government and its agencies), notes the first essay The State of Quebec Indebtedness, grew in nominal terms (without adjusting for inflation) from $37.6 billion in 1990-91 to $175.5 billion in 2012-13, and now represents 49 per cent of Quebec's Gross Domestic Product (GDP)-the highest percentage among the provinces. On a per person basis, each Quebecer's share of the debt in 2012/13 was $21,708 or, based on 2011/12 tax data, $43,804 per income taxpayer. Furthermore, interest payments on the debt (also known as debt service costs) were $9.8 billion in 2012-13, more than 11 per cent of government revenue.

"During this provincial election, it's worth noting that both Parti Quebecois and Liberal governments have contributed to the debt since the early 1990s. The failure of successive Quebec governments to control spending has added significantly to the province's debt load and today saddles Quebec taxpayers with more than $9 billion in interest payments. That's money unavailable for health care, education or other social services," said Filip Palda, Fraser Institute senior fellow and professor at the Ecole nationale d'administration publique.

The second essay, Comparing the Indebtedness of Quebec and Its Neighbours, compares Quebec to jurisdictions in the United States and Canada including Ontario, which has a lower debt as a share of GDP (37.5 per cent) than Quebec (49 per cent).

"Although Ontario's debt receives considerably more media and political attention, Quebec's indebtedness is the most significant among Canada's provinces," said Sean Speer, essay series editor and associate director of fiscal studies at the Fraser Institute.

The essay compares Quebec with 24 U.S. states by measuring bonded debt (the part of government indebtedness represented by bonds).

Quebec's bonded debt for 2011 (the last year data was available) was $160.8 billion, which represents roughly 47 per cent of the province's GDP, for a debt-to-GDP ratio two and a half times higher than most indebted U.S. states. Vermont comes closest, with a bonded debt-to-GDP ratio of 17.1 per cent. New York's bonded debt (the highest in dollar terms among U.S. states) represents 12.3 per cent of that state's GDP. Quebec's 47 per cent debt-to-GDP ratio, by comparison, is almost four times higher.

"Comparisons with other North American jurisdictions including New York, a state known for its debt issues, might prompt Quebecers to insist that their government take action to curb its debt problem," Speer said.

The final essay, The Past and Future of Quebec's Public Debt, notes that Quebec's net debt may reach more than 57 per cent of GDP by 2022-23 if the status quo, which includes current market conditions and patterns of taxation and spending, is maintained.

"Quebecers deserve a robust public debate about Quebec's debt and any potential government reforms, because ultimately government debt rests on the backs of taxpayers-they're the ones that pay," Palda said.

Follow the Fraser Institute on Twitter / Become a fan on Facebook

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

Add to Digg Bookmark with del.icio.us Add to Newsvine

Sean Speer
Associate Director, Fiscal Studies, Fraser Institute
(604) 688-0221 ext. 532
[email protected]

Filip Palda
Professor, ENAP
Senior Fellow, Fraser Institute
(514) 312-3704
[email protected]

Mark Hasiuk
Media Relations Specialist, Fraser Institute
(604) 688-0221 ext. 517
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
SYS-CON Events announced today that Coalfire will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, will contrast how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He will show the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He will also have live demos of building immutable pipe...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
A completely new computing platform is on the horizon. They’re called Microservers by some, ARM Servers by others, and sometimes even ARM-based Servers. No matter what you call them, Microservers will have a huge impact on the data center and on server computing in general. Although few people are familiar with Microservers today, their impact will be felt very soon. This is a new category of computing platform that is available today and is predicted to have triple-digit growth rates for some ...
Governments around the world are adopting Safe Harbor privacy provisions to protect customer data from leaving sovereign territories. Increasingly, global companies are required to create new instances of their server clusters in multiple countries to keep abreast of these new Safe Harbor laws. Is it worth it? In his session at 19th Cloud Expo, Adam Rogers, Managing Director of Anexia, Inc., will discuss how to keep your data legal and still stay in business.