You may have heard of comparing the net debt to the gross domestic product. Somebody gave Tracy Perry a bunch of numbers to read out during the recent waste-of-time filibuster. One of the problems with her numbers was that she wasn't always comparing apples to apples. The numbers she used from the 1990s compared cash debt to GDP while the more recent figures use a completely different accounting basis to make comparisons.
There are problems with this, as we've noted before, not the least of which is that oil revenues tend to cloud the picture.So just for the sake of making a comparison, your humble e-scribbler took the GDP figures presented in The economy, a document released with the budget. For debt, let's use the cash debt figures from the Estimates. That'll make it easier to compare apples to apples over the next few posts as we wade through this.
It's all in millions of dollars. In other words, the 31 thousand million means $31 billion.
Year
|
GDP
|
Oil + M
|
Gov
|
Net oil, min
|
Net oil, min, + gov
|
Cash Debt
|
2014
|
31,340
|
9,805
|
7,975
|
21,535
|
13,560
|
12,158
|
2013
|
33,657
|
11,521
|
6,317
|
22,136
|
15,819
|
11,530
|
2012
|
31,732
|
11,692
|
5,774
|
20,050
|
14,276
|
06,700
|
2003
|
14,206
|
02,674
|
2,990
|
11,532
|
08,542
|
07,862
|
In the decade from 2003 to 2013, the value of all the goods and services in the province more than doubled. Look at the relative position of oil and minerals. Oil and mineral production quadrupled in value in the decade. Oil and minerals went from being 19% of total GDP to 34% a decade later.
Look at the relative position of government spending. it went from being 21% of GDP in 2003 to 19% in 2013 even though government spending had doubled.
Now look at the debt. Debt to GDP in 2003 was 55% and 34% a decade later. Look at debt compared to the GDP without oil. 70% in 2003 to 52% in 2013. But let's be careful about that government one since the spending is sustained by oil and - these days - by increased debt through borrowing.
Let's take government spending out of the GDP as well. Just compare those last two columns. Not so bad, even as recently as 2012 but in a single year, the debt to GDP (net of oil, minerals and government) started looking like the same number. Here it is as a chart.
A couple of notes:
- What you are seeing here is just a work in progress. These are just some raw numbers without anything else to say about them except looking at some comparisons. In other words, there might be something here. There might not be.
- The government numbers might be a bit light, especially in 2003.
- The debt to GDP comparison one is a stock one favoured by all sorts of analysts. Does it measure what we want it to measure? Not sure.
- One thing to consider is how much government could take out of the economy in the way of rents and taxes to service the debt. The idea of comparing the debt to the size of the economy has something to do with the theoretical ability to tap revenue to service the debt. Some people think we could tax more. Others disagree.
Over the next few days, we'll post some other figures as an exploration of the economy and our public finances.
-srbp-