NOT SUSTAINABLE OVER THE LONG TERM

  Leader Post:   At some point in the next 20 to 30 years, on current trends, one or more of the provinces is likely to default on its debts. That is the inescapable message in the Parliamentary Budget Officer’s latest annual “Fiscal Sustainability” report.
   It is by no means a certainty: these sorts of extrapolatory exercises necessarily involve holding constant certain policy variables that are unlikely to be held constant. That phrase “on current trends” is there for a reason. But it is more than a possibility. The PBO’s bland phrasing, to the effect that the provinces’ fiscal position, collectively, is “not sustainable over the long term,” conceals much worse news about individual provinces.
   The key table is the one labelled Net Debt: Subnational Governments, on page 24 of the report. As of 2017, the provinces’ net debts average about 26 per cent of GDP — five points better than the federal government, at 31 per cent — ranging from a high of 43 per cent in Quebec to a low of 1.6 per cent in Alberta.