Joe Oliver, the former finance minister who oversaw Canada’s plunge into recession last year, is a mere citizen of Ontario now. The debt bogeyman who haunted him in Ottawa appears to have followed him home. “Ontario is the largest subnational debtor in the world,” Oliver proclaimed from the comment pages of theFinancial Post at the end of December, as if that (unsupported) fact carried profound meaning.
Canada’s provinces are now the focus of the fiscal prudes. Stephen Gordon, the widely read Laval University economist, highlights the fact that provincial debt surpassed federal debt for the first time in 2015. The Fraser Institute, the Vancouver-based think tank that favours low taxes and small government, tallied the combined debt of Ottawa and the provinces and came up with a total of $1.3 trillion, compared with $834 billion eight years ago. Governments will spend more on interest this year ($26 billion) than former prime minister Stephen Harper spent on defence in 2015 ($24 billion), the Fraser report said by way of showing the “displacement effect” of fiscal indiscipline.
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