Surprise—Alberta’s government debt burden is approaching Quebec’s
The recent provincial budgets released by the Quebec and Alberta governments are a study in contrasts of government debt.
On one hand, Quebec has a high-debt government that’s aiming to reduce its debt burden. On the other hand, Alberta is a low-debt government that’s blowing its unique advantage by accumulating debt at a startling pace.
The end result: Alberta’s government debt burden is approaching Quebec’s.
Not too long ago, Quebec was clearly the “government debt” problem child of confederation while Alberta was unique in that it held no net debt at all.
In fact, as recently as 2015/16, Alberta was the only province in Canada with financial assets exceeding government liabilities. Quebec in contrast was the most indebted province in terms of per person net debt. The gap in net debt between Alberta and Quebec was more than $23,000 per person.
However, 2015/16 was an important year in the fiscal histories of both provinces. Quebec balanced its operating budget for the first time in seven years, beginning a string of surpluses that continued to this week’s budget. This puts the province in a position to start reducing its debt burden slightly, and indeed, per person net debt dropped from $22,402 to $21,580 last year (2017/18).
For Alberta, 2015/16 was the last year the province’s financial assets exceeded its debts. Since then, Alberta has been a net debtor and its net debt per person climbed to $4,729 in 2017/18.