2015 Quebec First Quarter GDP Up 1.6% Annualized

Somewhat surprisingly, Quebec reported GDP growth in the first quarter of 1.6% (annualized). That compares to the now revised 0.8% drop in Canada overall and the -0.2% GDP growth for Ontario.

Both exports and imports declined:

"In the first quarter 2015, exports shrank (-2.9%) after four consecutive increases, solely due to international exports of goods (-7.2%), as all other components posted gains. Total imports contracted 3.2%—imports from other countries dropped by 3.8% and those from other provinces by 2.0%."

Considering that the second quarter GDP for Canada was announced as -0.5%, it will be interesting to see how the various provinces do. Will Ontario print a more Quebec like number? Will Alberta have even worse numbers than in the first quarter?

Quebec Balances 2015-2016 Budget, Ontario Obviously No

We won't know the Ontario numbers for 2015-2016 until the budget is released, but I wanted to note that Quebec has plans to balance their budget in 2015-2016. Ontario's certainly won't be balanced, although the Liberals have been planning for many years to do it in 2017-2018.

Quebec's 2014-2015 deficit was only $2.35 billion, way less than Ontario's $10.9 billion deficit adjusting for population and GDP. Ontario's 2014-2015 is also significantly higher than the federal deficit.

Obviously Quebec has controlled expenses to a much greater extent over the past few years (Ontario's 2014-2015 is actually bigger than the 2013-2014 deficit which in turn was bigger than the 2012-2013 deficit).

Quebec's debt to GDP ratio will peak at 54.9% this March and start to decline with this budget. Ontario's will continue to rise although I'm skeptical it will ever match Quebec's. According to Wikipedia, Ontario's debt to GDP ratio was 37.4% in 2013, although that's obviously higher now.

March 2015 Canada Jobs Numbers Out, 28,700 Gained

Statscan just released the March 2015 jobs numbers with 28,700 new jobs. Earlier I predicted 20,000 new jobs so I wasn't off by much. That's up from the 1000 job loss for the country in February and arguably better than the 126,000 jobs the US gained in March.

According to the Statscan summary here, Saskatchewan and Manitoba gained jobs while the other provinces stayed roughly the same. Which seems a little strange, as one would expect some problems for Alberta and Saskatchewan has oil influence as well.

The summary also notes:

"In March, employment was also little changed in both Quebec and Ontario. In Quebec, year-over-year growth was 0.8%, with all of the gains in the first two months of 2015. In Ontario, employment edged up 0.5% compared with 12 months earlier."

Considering the Ontario population is growing around 1% a year, 0.5% isn't particularly impressive. Quebec's number is just weird as I'm not sure what's special about January and February this year for that province.

I'll have a closer look at the Ontario numbers in the next couple of days.

Quebec's 2014-2015 Budget Deficit Versus Ontario's, Some Numbers

One aspect of Ontario's rather large structural deficit is how it compares with other provinces. If the Wynne Ontario budget passed for $12.5 billion versus a population of 13.54 million (Wikipedia), that's a budget deficit of $923.19 per person. Ontario's GDP at the end of 2013 was 692.4 billion according to Ontario's ministry of finance or $51,137.37 per person.

Quebec's 2014-2015 budget deficit is $3.7 billion according to this National Post article, although I'm not positive that refers to the 2014-2015 year. Quebec's population is 8.155 billion according to Wikipedia which produces a budget deficit of only $453.71, considerably lower than Ontario's. I'm trying to get an up to date GDP number for Quebec, but even adjusting for GDP, I still think that Ontario's is considerably higher. Not adjusting for GDP it is more than twice as high per person.  

Cambridge Firm Pays Massive Global Adjustment Charge For Electricity

This article in Cambridge Now about Integrated Packaging Film's massive monthly electricity bill is quite interesting, especially since they included the actual bill. The actual electricity charges are 12K, which when everything is included (including HST) becomes 62.5K, including a global adjustment charge of 30.5K and a debt retirement charge just over $2,700. The debt retirement charge may disappear in 2016 (my prediction don't bet on it), but the high global adjustment charges are here to stay.

Has any economist done any research trying to estimate how many Ontario manufacturing jobs have been cost by high electricity prices? Because someone should. Ideally it would be interesting to compare to Quebec (which has an even larger manufacturing sector) since the recession as Quebec prices have stayed relatively low in comparison.

Good National Post Info Graphic on Federal and Provincial Debt

The National Post often has good info graphics and this one, detailing Canada's federal and provincial debts is another good one. Quebec, has the most debt per capita ($21,420) followed by Ontario ($17,626). However Quebec looks to be on track to eliminating its deficit in the next couple of years, whereas Ontario is nowhere near eliminating its deficit. Could Ontario pass Quebec soon as the most indebted per capita? It is entirely possible considering the province is adding around $1,000 in debt per capita per year.

Bad Quebec First Quarter GDP Growth

Here's a National Post article reporting Quebec's GDP growth in the first quarter:

The province’s gross domestic product grew by 0.2% in the first quarter of 2012, the same as the two quarters before, according to data released Thursday by Quebec’s government statistical agency. Its 0.6% annualized growth rate for the first three months of the year compares to 1.9% for Canada as a whole.

Wikipedia's reports Quebec's population growth rate at 0.7% a year in 2006. So for the last three quarters, GDP growth per capita in Quebec has been basically zero. Considering the student disruptions recently I can't see the second quarter number being that great either. Quebec has actually done a reasonable job in reducing their deficit, mainly by raising taxes. I'm wondering if this has been impacting GDP growth of late.

Hopefully Ontario's number for the first quarter will be out soon. I'm very curious to see that. Quebec's bad number is clearly dragging the Canadian number down. I doubt Ontario's number will be as bad as Quebec's, but you never know.

When Will Alberta's GDP Exceed Quebec's?

I looked at the provincial GDPs on Wikipedia, and for 2010, Quebec's was $319,348 versus $263,537 for Alberta (millions). If Alberta outgrows Quebec by an average of 3% a year it will take seven years for Alberta's GDP to exceed Quebec's. If Alberta outgrows Quebec by an average of 3% a year it will take ten years. I should probably update these with the 2011 numbers, because I'm guessing Alberta had some healthy growth versus weak growth for Quebec.

Quebec Deficit on Track for Elimination in 2013

Surly Hamiltonian has been going on about Quebec's better deficit performance than Ontario for a while. This article has more evidence of just how much better Quebec is doing:

"The happier news is that this has enabled Quebec to remain on course toward its ambitious goal of balancing the provincial budget by 2013.

So far in the current fiscal year, which ends March 31, Quebec is on course to reduce its deficit to $3.8 billion, or about 1.1 per cent of the province’s total economic output.

That’s better than the average of 1.8 per cent among all provinces.

It’s far lower than in Ontario, where the estimated deficit remains uncomfortably high at about 2.5 per cent of provincial output and where budget balance isn’t predicted before 2017."

Admittedly elsewhere in the article the Quebec government is doing this by raising taxes significantly. However the Quebec deficit is remarkably close to disappearing, even in challenging economic conditions. Ontario unfortunately is continuing to lard on debt, with not a lot of relief in sight. Even sadder is that the mainstream media in Ontario is not making these comparisons.

Canadian Provincial GDP Per Capita Comparisons

One issue with looking at Ontario's GDP growth is that the province has relatively high population growth due to immigration. So what is going on per capita sometimes is even more interesting. On wikipedia, there's some 2008 numbers for the provinces. Ontario's was $45,194 which compares favourably to Quebec's $39,057 and similar to BC's $45,103. However Alberta's at $81,188 and Saskatchewan's $64,534 dwarfs Ontario's, no doubt helped by strong commodity prices. Since these are 2008 numbers, and Ontario's anemic growth since then I'm wondering when Alberta's number will end up being twice that of Ontario.

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.