A favourite talking point of conservatives in Ontario has for some time been the claim that we have the highest debt of any sub-sovereign political entity in the world. While technically true, this claim is highly misleading and is used as justification to call for unwarranted and extreme austerity, and will likely be used as justification to implement said cuts over the next 4 years in Ontario. Thus it's important to put this claim into context, to be able to respond to this claim and spot columnists and politicians trying to trick you by leaving out important context. I will mostly be comparing Canada to America, since it's a much more direct comparison, and this is the reference point often used in opinion pieces on this topic, but most of this is equally true if we compare Canada to Europe, Asia, South America, etc.
The reality is that provinces in Canada have a lot of spending responsibilities that are normally borne by the federal government in other countries. Health care is a great example of one of these differences, in Canada each province has it's own health care insurer (OHIP in Ontario), while in America there is only one Medicare and one Medicaid. This means that any debts associated with running a universal healthcare system and keeping it solvent year-to-year or keeping it functioning through a recession will be borne by the provincial governments in Canada, but by the federal government in America. Education is another big burden handled by the provinces in Canada but largely by the federal government in America, and there are many more.
We can easily spot these differences by looking at the budgets of US states vs the budgets of Canadian provinces. Here are some of the budgets as compared to population of the four largest American states by population:
- California's 2018-2019 budget spends $138 billion USD ($182 billion CAD), and California has a population of 39.5 million people. That's a spending of $4,608/person (in CAD).
- Texas' 2018-2019 budget spends $217 billion USD ($287 billion CAD), and Texas has a population of 28.3 million people. That's a spending of $10,141/person (in CAD).
- Florida's 2017-2018 budget spends $89 billion USD ($118 billion CAD), and Florida has a population of 21 million people. That's a spending of $5,619/person (in CAD).
- New York's 2018-2019 budget spends $98 billion USD ($130 billion CAD), and New York has a population of 19.8 million people. That's a spending of $6,566/person (in CAD).
- America's 2018-2019 federal budget spends $4.1 trillion USD ($5.4 trillion CAD), and America has a population of 325.7 million people. That's a spending of $16,580/person (in CAD).
Now let's look at Canada's four largest provinces by population:
- Ontario's 2018-2019 budget planned to spend $159 billion, and Ontario has a population of 13.6 million people. That's a spending of $11,691/person.
- Quebec's 2018-2019 budget spends $109 billion, and Quebec has a population of 8.2 million people. That's a spending of $13,293/person.
- British Columbia's 2018-2019 budget spends $54 billion, and British Columbia has a population of 4.6 million people. That's a spending of $11,739/person.
- Alberta's 2018-2019 budget spends $56 billion, and Alberta has a population of 4.1 million people. That's a spending of $13,659/person.
- Canada's 2018-2019 federal budget spends $339 billion, and Canada has a population of 36.3 million people. That's a spending of $9,339/person.
So with the slight outlier being Texas, American states spend much less than Canadian provinces relative to the size of their populations, and the American federal government spends much more than the Canadian federal government relative to the size of their populations. So we can see that comparing the spending of Canadian provinces to the spending of other sub-sovereign entities around the world is not a fair, apples-to-apples comparison.
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