Would you be surprised to learn that Canadians carry more government debt per person than someone living in Greece? It’s true.
In 2011, the average amount of government debt per person in Greece stood at $34,300, or about $137,000 for every family of four. In the same year, the average amount of government debt per person in Canada stood at $38,400 per person—or about $154,000 for every family of four (provincial and federal debt combined).
Ontario and Quebec alone owe more than Greece. Greece has a national debt of roughly $400 billion. Ontario and Quebec owe more than $500 billion. Ontario owes $260 billion. Quebec owes $250 billion. Quebec’s debt is so high that if it were an independent country, according to the Montreal Economic Institute, on a debt-to-GDP basis it would be one of the five most indebted nations on the planet, right up there with Japan, Greece, Italy, and Iceland. (Debt-to-GDP is the amount of money a government owes compared to the size of its economy.)
In comparison, Spain, another debt-ridden European country, had a debt-to-GDP ratio of 70% in 2011. Spain’s 2011 per person share of government debt is only $19,400, about half of what the per person share is in Canada. Yet Spain has been all over the news this past while because Spanish government debt and overspending has spawned a 25% unemployment rate and the country is looking for a bailout of as much as $360 billion.
Many Alberta taxpayers assume the debts of Quebec, Ontario, or any other province will never affect us. Yet in the same way that the nations of the European Economic Union (EU) share a common currency, Alberta shares a common currency with Quebec, Ontario, BC, and the other provinces. A shared currency is an economic partnership, and every member of an economic partnership—at some point—will share the consequences if another member buries itself under a mountain of debt it is unable to pay.
Through transfer payments, Alberta taxpayers already indirectly pay for Quebec social programs such as subsidized daycares, where Quebecers can drop their children off at government-funded facilities for a mere $7 per day. The implications of Canada’s economic partnership means in the same way that German and French taxpayers are now being forced to carry Greece, and possibly Spain, Alberta could easily be called upon one day to financially support other provinces even beyond the existing transfer structure.
The fact is that if there is any government in Canada that should be balancing its budget every year and speaking up to promote fiscal responsibility in Canada, it’s Alberta. We take in tens of billions in resource royalties. Yet earlier this year, the Redford government passed our fifth straight deficit, and the Premier has clearly indicated that in the coming days, she has every intention of accelerating provincial government spending to new record highs.
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