Tuesday, October 4, 2011

Ontario's Deficits As a Percentage of GDP Versus Other Provinces

One often hears an explanation for Ontario's recent high deficits is because of the recession. Sure recessions hurt. But other provinces have suffered too, although resource rich provinces haven't suffered as much. How does Ontario compare in terms of deficits with other other provinces? This link has a great plot of provincial deficits as a percentage of GDP for 2009/2010, which covers the tail end of the recession.

One thing one notices is just how bad Ontario is compared to all the other provinces. Quebec which also has a lot of manufacturing and should have been hurt by the recession has a considerably smaller deficit as a percentage of GDP. I would be interested in digging in to why Quebec is better even during the recession. My guess is that they've had lower salary increases for public sector workers over the past few years. I'm guessing they haven't been giving physicians and teachers 3% increases the past few years. Also props to Manitoba. Not all NDP premiers are Bob Rae.

That was for 2009/2010. What about now? Here's a Star link saying the 2011/2012 (at least I think it refers to that) budget deficit will be $16 billion. Here's a Reuters article about the Quebec 2011/2012 deficit being $3.8 billion and the budget being balanced in 2013/2014 (which I'm a bit skeptical of). Adjusting for population and GDP, the Ontario number is still way worse and certainly there's no chance of the budget being balanced in 2013/2014.

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