Cabinet yesterday described 155,000 striking federal employees as unreasonable but stopped short of issuing a final offer to the Public Service Alliance of Canada. Prime Minister Justin Trudeau said cabinet was “there to respect collective bargaining” though it used back-to-work legislation twice before: “I don’t have infinite patience.”
The government’s claim that Canada enjoys comparatively low levels of debt originates from an International Monetary Fund (IMF) database, as displayed on page 24 of the most recent federal budget. According to the IMF, Canada does indeed have the lowest net debt-to-GDP ratio among the G7 countries (Germany, Italy, Japan, France, the United Kingdom and the United States).
But the limited set of comparison countries appears to have been carefully selected. Extending the analysis to include a broader group of countries provides a more accurate assessment of Canada’s comparative indebtedness. Among 29 OECD countries for which comparable data are available, Canada drops to 11th in 2023 when ranked by net debt as a share of the economy — no longer best, just middle of the pack.
And there’s a problem with “net debt,” the measure the government uses. Net debt is a narrow measure of indebtedness that subtracts financial assets from total government debt. The implicit assumption is that those assets could be used to offset debt. But the financial assets used to calculate Canada’s net debt include those of the Canada and Quebec Pension Plans (CPP and QPP), which totalled $654.7 billion as of last December 31st.
The difference between Canada’s gross debt and net debt, according to the IMF, is almost $2.6 trillion at the end of 2023. In other words, the value of net assets held in the CPP and QPP explains more than a quarter of the difference between Canada’s gross and net debt.
Why does this matter? The assets of the CPP and QPP are required to meet obligations for existing and future retirees, so they couldn’t be used to offset government debt without compromising the two plans’ ability to provide benefits to retirees.
Desjardins Economics does offer a comparative analysis of net debt excluding pension assets among G7 countries. By this measure, Canada has the second lowest net debt-to-GDP in the G7. However, this is again flawed. Desjardins only looks at central government debt. In other words, it compares the indebtedness of Canada’s federal government to the indebtedness of central governments in other countries. But while the U.K., France, Japan and Italy are all “unitary” states, Canada is a federal country where provinces have many constitutional powers (i.e., health care and education), spend a lot and have accumulated significant debt. Comparing the net debt of Canada’s federal government to that of central governments in G7 countries is not an apples-to-apples comparison.
A better measure of Canada’s comparative indebtedness is to compare “gross general government debt” to GDP across countries. Gross debt, according to the IMF, includes “all liabilities that require future payment of interest and/or principal by the debtor to the creditor,” while general government includes all levels of government.
Using this measure, Canada falls from 11th among 29 OECD countries when net debt is measured to 20th. Our nine-position decline in the ranking is the second-largest of any country (behind only Finland, which falls 16 places). And our gross debt is equal to 111 per cent of our GDP, which isn’t good by anyone’s standards.
By continuing to repeat the claim that Canada has comparatively low levels of debt, the Trudeau government is misleading Canadians. The data clearly demonstrate that Canada is highly indebted relative to many of our peers — and that’s far from an enviable fiscal position.
Cabinet in last minute revision to a language bill would mandate “equality of status and use of English and French in Canadian society.” The clause amends a bill that for the first time extends bilingual requirements to the private sector: “We want a modern ambitious law with teeth, a law that will protect and promote French across Canada.”
You’re not supposed to talk about abortion legislation in Canada — certainly not if you’re pro-life, but not if you’re pro-choice either. Legislation would violate Canada’s supposedly sacred legal vacuum on abortion, we are told, unique though it may be among developed nations. Open the door to try to enshrine women’s rights in law, we are warned, and heaven knows what anti-choice nightmares might charge through.
If you ask me, those fears are wildly overblown — but at the same time, from a pro-choice standpoint like Biron’s, there’s no need to pursue legislation. If she persists in this endeavour, however, it could be bad news for the federal Liberals and Prime Minister Justin Trudeau.
“What I want to consecrate is the principle. I want to hang it on the wall,” Biron told La Presse. “I want us to say that this right is a right in Quebec, we believe in it and we want to protect it.” Justice Minister Simon Jolin-Barrette has offered Biron “a small team of lawyers” to explore the option, La Presse reported, and apparently she made Premier François Legault aware of her intentions before entering politics last year. Biron acknowledged that she was treading on federal jurisdiction; if Ottawa wanted to legislate on the matter itself, she said, that would take precedence.
Canada is bad enough. Now she wants to make it the baby-killing capital of the world.
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