Friday, June 2, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts
No Result
View All Result
Macdonald-Laurier Institute

Globe and Mail editorial endorses MLI study on provincial solvency and federal obligations

October 26, 2012
in In the Media, Latest News
Reading Time: 2 mins read
A A

October 26, 2012 – MLI’s study, Provincial Solvency and Federal Obligations, by author Marc Joffe, is the subject of a latest editorial in The Globe and Mail today! The editorial calls Joffe’s conclusions “quite persuasive.” An excerpt below:

Surprisingly, Alberta is in the greatest danger – in the long term – of default, according to a study by Marc Joffe, formerly of Moody’s Analytics, commissioned by the Macdonald-Laurier Institute. Quebec, currently the most fiscally troubled, is in the least peril – that is, over the next 30 years.

Mr. Joffe compares interest expense with revenue, in a simulation based on current trends, extended over the coming three decades. The Alberta government’s large deficits and the provincial economy’s exposure to volatile oil-and-gas revenues make his conclusions quite persuasive. He adds the less familiar point that Statistics Canada predicts that the population of Alberta will age more quickly than those of other provinces – with concomitantly greater health-care costs, as well as a diminishing labour force.

The full editorial is copied below

Debt, and the long-term vulnerability of Alberta

The Globe and Mail, October 26, 2012

Jim Flaherty, the Minister of Finance, acknowledged on Wednesday that the federal government has put on hold its targets for eliminating not only its own debt but also the net government debt for the whole country, including the provinces. He is probably right that the provincial governments’ prospects of debt reduction are much more dubious than Ottawa’s.

Surprisingly, Alberta is in the greatest danger – in the long term – of default, according to a study by Marc Joffe, formerly of Moody’s Analytics, commissioned by the Macdonald-Laurier Institute. Quebec, currently the most fiscally troubled, is in the least peril – that is, over the next 30 years.

Mr. Joffe compares interest expense with revenue, in a simulation based on current trends, extended over the coming three decades. The Alberta government’s large deficits and the provincial economy’s exposure to volatile oil-and-gas revenues make his conclusions quite persuasive. He adds the less familiar point that Statistics Canada predicts that the population of Alberta will age more quickly than those of other provinces – with concomitantly greater health-care costs, as well as a diminishing labour force.

Alberta’s Heritage and Sustainability funds have been slowly but steadily drained, in particular by the Stelmach and Redford governments’ annual deficits.

Thirty years are quite a long time. There will be opportunities to reverse the trend, but the acknowledgement of the problem could easily come at a very awkward time, at a trough in the commodities cycle, when a retrenchment could exacerbate a recession.

The long-term vulnerability of Alberta should not be a great surprise. Overconfidence can be disastrous, as the financial crisis of 2008 vividly showed. The bond markets may be overconfident now about Canadian provinces, because, in the Great Depression, Ottawa bailed out (to varying extents) four of them, including Alberta, which nobody then thought of as a rich province.

If Alberta runs into serious trouble in two or three decades, it may not attract as much sympathy as it did in the 1930s.

Premier Alison Redford and Doug Horner, the Minister of Finance, need to change course in their next budget – while the next election is still a comfortable way off.

—

Tags: Marc Joffeprovincial solvency
Previous Post

MLI study in Globe and Mail and Sun News: End provincial fights over energy, study urges

Next Post

MLI Newsletter Vol. III, No. 5

Related Posts

Canada’s inadequate defence research funding is more than just a security risk: Richard Shimooka in the Hub
Columns

Canada’s inadequate defence research funding is more than just a security risk: Richard Shimooka in the Hub

June 1, 2023
In Canada, courts mandate socialism to fulfil charter rights: Bruce Pardy in the National Post
Columns

In Canada, courts mandate socialism to fulfil charter rights: Bruce Pardy in the National Post

June 1, 2023
An honourable man in the wrong place at the wrong time: Charles Burton in iPolitics
Columns

An honourable man in the wrong place at the wrong time: Charles Burton in iPolitics

June 1, 2023
Next Post
MLI: A Top 20 New Think Tank Worldwide in 2010

MLI Newsletter Vol. III, No. 5

Newsletter Signup

Follow us on

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario, K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

  • Inside Policy Magazine
  • Annual Reports
  • Jobs
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts

© 2021 Macdonald-Laurier Institute. All Rights reserved.