Saturday, December 6, 2014

Quebec's 2014 Deficit Versus Ontario's, Ontario's Much Higher

The National Post had a good article about Quebec's current finances here. Surly Hamiltonian is generally interested in all the provinces deficits, however especially Quebec's because of its relationship to Ontario. Some noteworthy numbers from the article:

"Total debt is forecast to hit 55.1% of GDP next year, and interest payments alone cost $30-million a day, he said."

"Mr. Leitao announced additional measures Tuesday to ensure Quebec meets its target of a balanced budget for 2015-16"

"Economic growth has been more sluggish than forecast in last June’s budget, sitting at just 1.6% for 2014. Tuesday’s update projects an increase to 1.9% growth next year, thanks to increased exports brought on by a rebounding U.S. economy and a lower Canadian dollar. The province is on track to post a $2.4-billion deficit this fiscal year, as forecast in the budget, Mr. Leitao said."

First I think Ontario's debt is arount 40% of GDP, so Quebec's is obviously considerably worse (although what's counted in those numbers could be different). Second, Ontario is hoping to balance their budget by 2017-2018 which seems unlikely, however in any case over the next couple of years Ontario's debt will be rising considerably faster than Quebec's.

Third, the fact that Quebec's GDP growth is only going to come in at 1.6% means it will probably be slightly worse than Ontario's, and is also a little weird considering their first quarter growth was pretty high at 2.4%, so either that was overestimated or the last three quarters were terrible.

Fourth and finally, if Quebec's deficit this fiscal year is $2.4 billion that's considerably lower than the $12.5 billion deficit that Ontario is predicting. Ontario's is likely slightly overestimating their's, and the population is bigger but that's still way higher per capita and as a percentage of GDP.

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