Prairie provinces’ debt a ticking time bomb

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The debt in Canada’s Prairie provinces has grown colossally during the COVID-19 pandemic, just as debt has in the rest of Canada and around the world.

At the end of 2020, Alberta’s debt was estimated at $98 billion, Manitoba’s was $28.6 billion and Saskatchewan’s was $15 billion.

These debts are an economic burden for the taxpayers and their effects will be felt in the long term. The younger generations will be the most affected. They will inherit degraded public finances and higher risk of paying for it.

Repaying the debt will be challenging for governments, even those with the best of intentions. Even with large provincial surpluses, it will take a long time to repay the debt.

Alberta’s largest surplus, in 2005-06, was about $8.5 billion; Manitoba had a surplus of $562 million in 2004-05; and Saskatchewan’s surplus in 2008-09 was $3 billion.

Based on those surpluses, it would take 12 years for Alberta to repay its debt, 50 years in Manitoba and five years in Saskatchewan. And that would occur only if these provinces enjoyed their largest surpluses year after year without interruption, and didn’t account for interest or the federal debt.

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