Alberta’s current deficits much larger than Ontario’s during aftermath of 2009 recession

Summary

• Alberta’s public finances are deteriorating rapidly, with the provincial government set to run a cumulative budget deficit of $27.6 billion over the three-year period from 2015/16 to 2017/18.
• Until recently, by far the largest deficits of any province since the turn of the century were those run by Ontario in the years during and following the financial crisis of 2008/09. From 2009/10 to 2011/12, Ontario ran a cumulative budget deficit of $3,864 per person (in 2015 dollars).
• Alberta’s current string of budget deficits are substantially larger than Ontario’s during that period. Between 2015/16 and 2017/18, Alberta’s cumulative budget deficit will be $6,385 per person ($2015 dollars).
• When we compare the budget deficits relative to the size of the provincial economies, Alberta’s current deficits are still larger than those run by Ontario during the years following the financial crisis.
• Alberta entered 2015/16 with no net debt at all. However, due to the size of current budget deficits and the resulting rate of debt accumulation, Alberta’s debt levels are rapidly converging with Ontario’s. In 2014/15, Ontario’s net debt per person was $24,256 larger than Alberta’s. In 2018/19, that gap is expected to have shrunk to $14,597 (both in 2015 dollars). In other words, about 40 percent of the per-capita debt gap between Alberta and highly indebted Ontario will have been wiped out in just five years.