Article Summary
Canadian Government Debt 2004: A Guide to the Indebtedness of Canada and the Provinces
Digital Publication by Niels Veldhuis & Todd GabelNiels Veldhuis and Todd Gabel broadly examine the $58 billion worth of debt reduction accomplished by the federal government between 1997-98 and 2001-02. They acknowledge that debt reduction is a laudable overall goal, and that any reduction (at all) is a good thing. This said, they also suggest that the costs associated with running government programs have concomitantly increased over this period of time.
Veldhuis and Gabel first categorize and explain liabilities. Then, they proceed to present numerical data to display the actual debt of the provinces, and of Canada as a whole, when liabilities, exposure to foreign currencies, and interest payments are included. Based on their findings, Veldhuis and Gabel conclude that total government liabilities amount some $2.7 trillion – a marked distinction from the $533 billion the federal government cites as the net federal debt.
Veldhuis and Gabel place significant emphasis on the issue of ‘unfunded liabilities’ through program commitments. They see programs such as the Canada Pension Plan and the Quebec Pension Plan in such a light; for them, when they refer to unfunded liabilities, it means that expected future contributions do not reach the levels of expected future pay out to cover such programs. The problem, for the authors, is that incorrect assumptions were made about the future of Canada’s economy vis-à-vis an aging Canadian demographic.
Despite the concerns thy express, Veldhuis and Gabel note that the situation does not look any better elsewhere in the world. According to the authors, on an international scale of debt, Canada places 14 out of the worlds 19 high-income nations. The authors do recognize, however, that Canadian governments – both federal and provincial – have taken critical steps to reduce overall debt, a move in the right direction.
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Policy Publication Details
| Author(s): | Niels Veldhuis & Todd Gabel; | ||
| Publisher: | Fraser Institute [ Visit Website ] | ||
| Year Published: | 2004; | Publisher Type: | Research Institute |
| Publicly Available: | Yes | Research Focus: | National; |
| Registration Required: | No | Language: | English |
| Payment Required: | No | Publication Format: | Adobe PDF |
Subjects / Categories:
Policy Articles / Fiscal & Budgetary / Federal & Provincial Budget
Policy Articles / Fiscal & Budgetary / Federal & Provincial Budget / 2004
Keywords / Tags:
Federal Debt; Provincial debt; National Debt; Canada; Unfunded liabilities; liabilities; Pension Plan; Old Age Security; Healthcare funding; debt reduction; program obligations.;