cover image: Budget deficits and surpluses in the Canadian provinces

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Budget deficits and surpluses in the Canadian provinces

13 Apr 2004

The drop in Standard & Poor’s rating of the Saskatchewan government to BBB+ in June 1992, and the subsequent difficulty the new NDP provincial government faced in finding investors to buy Saskatchewan bonds, marked the beginning of a period of fiscal austerity at both the federal and the provincial levels, that was to lead to the elimination of recurrent deficits from the budgets of most governmen [...] In fiscal terms, this means that the provincial premier and his finance minister may lead the game according to their preferences and to the characteristics of the fiscal situation they inherit: if the premier is more of a “spender” than a “guardian,” discipline in fiscal policy is less likely. [...] In 1992, some officials of the Saskatchewan government contemplated the possibility of defaulting on the provincial debt and of letting the federal government monitor the recovery from the fiscal crisis in which the government had found itself. [...] While federal transfers to the provinces somewhat protected provincial finances in the 1980s, their drastic cut by the federal government as part of its deficit elimination policy in the 1990s had provincial administrations to bear most of the effect of the 1990 recession. [...] This measure controls for inflation and for the size of the public sector while taking into account the two problems of different price dynamics in the public and the private sectors and of measuring only government behavior.
government politics budget public finance economics economy taxation fiscal policy economic policy government policy political system economic cycle government budget government budget balance macroeconomic provincial new brunswick errors and residuals province ols test finance, public ordinary least squares heteroscedasticity autocorrelation durbin–watson statistic

Authors

Tellier, Geneviève

Pages
20
Published in
Canada

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