Study
| EST. READ TIME 2 MIN.Albertans will pay $442 each in interest this year due to growing provincial government debt
The Decline of the Other Alberta Advantage: Debt Service Costs in Alberta Are Rising
Summary
- Throughout recent history, Albertans have enjoyed a substantial fiscal advantage other Canadian taxpayers, resulting from the fact that government debt interest payments in Alberta have been far lower than in any other province.
- For example, in 2007/08, Alberta’s provincial government spent just $61 per person on debt interest payments. The other nine provinces had to spend between $521 and $1,476 per person servicing debt.
- This fiscal advantage has saved Alberta’s taxpayers billions of dollars each year in the recent past.
- Alberta’s debt interest payments were so low because the province carried very little debt. Until 2016/17, Alberta was “net debt free,” meaning that its financial assets were greater than its liabilities.
- In the most recent fiscal years, however, Alberta’s net asset position has flipped from positive to negative and the province is quickly racking up debt.
- As a result of rapid debt accumulation, the cost of servicing Alberta’s debt is quickly catching up with other provinces. Current projections suggest that by 2020/21, Alberta’s debt service payments per person will exceed British Columbia’s and will be approximately 70 percent as large as Ontario’s.
- If Alberta’s pace of debt accumulation continues at a similar rate in subsequent years, Alberta will join Newfoundland & Labrador and Quebec (and possibly Ontario) as the only provinces paying more than $1,000 per year in per-capita debt interest payments.
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Steve Lafleur
Steve Lafleur is a research director at the Institute for Research on Public Policy, a former senior fellow of theFraser Institute and a former senior policy analyst at the Fraser Institute. He holds an M.A. in Political Science from Wilfrid Laurier University and a B.A. from Laurentian University where he studied Political Science and Economics. He was previously a Senior Policy Analyst with the Frontier Centre for Public Policy in Winnipeg and is a Contributing Editor to New Geography. His past work has focused primarily on housing, transportation, local government and inter-governmental fiscal relations. His current focus is on economic competitiveness of jurisdictions in the Prairie provinces. His writing has appeared in every major national and regional Canadian newspaper and his work has been cited by many sources including the Partnership for a New American Economy and the Reason Foundation.… Read more Read Less… -
Ben Eisen
Senior Fellow, Fraser Institute
Ben Eisen is a Senior Fellow in Fiscal and Provincial Prosperity Studies and former Director of Provincial Prosperity Studies at theFraser Institute. He holds a BA from the University of Toronto and an MPP from the University of Toronto’s School of Public Policy and Governance. Prior to joining the Fraser Institute Mr. Eisen was the Director of Research and Programmes at the Atlantic Institute for Market Studies in Halifax. He also worked for the Citizens Budget Commission in New York City, and in Winnipeg as the Assistant Research Director for the Frontier Centre for Public Policy. Mr. Eisen has published influential studies on several policy topics, including intergovernmental relations, public finance, and higher education policy. He has been widely quoted in major newspapers including the National Post, Chronicle Herald, Winnipeg Free Press and Calgary Herald.… Read more Read Less… -
Milagros Palacios
Director, Addington Centre for Measurement, Fraser InstituteMilagros Palacios is the Director for the Addington Centre for Measurement at the Fraser Institute. She holds a B.S. in IndustrialEngineering from the Pontifical Catholic University of Peru and a M.Sc. in Economics from the University of Concepcion, Chile. Ms. Palacios has studied public policy involving taxation, government finances, investment, productivity, labour markets, and charitable giving, for nearly 10 years. Since joining the Institute, Ms. Palacios has authored or coauthored over 70 comprehensive research studies, 70 commentaries and four books. Her recent commentaries have appeared in major Canadian newspapers such as the National Post, Toronto Sun, Windsor Star, and Vancouver Sun.… Read more Read Less…
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