Welcome!

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

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

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
Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified – now it's a component-based well-performing framework. This immersive one-day workshop at 18th Cloud Expo, led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and the product company SuranceBay, will provide you with everything you wanted to know about Angular 2.
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
As the rapid adoption of containers continues, companies are finding that they lack the operational tools to understand the behavior of applications deployed in these containers, and how to identify issues in their application infrastructure. For example, how are multiple containers within an application impacting each other’s performance? If an application’s service is degraded, which container is to blame? In the case of an application outage, what was the root cause of the outage?
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, will show how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningfu...
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...