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Given
Canada's enormous property bubble that is guaranteed to pop, it should be no
surprise to discover Canadians losing sleep over their finances.
According
to the March RBC Canadian Consumer Outlook Index, most Canadians (65 per
cent) are losing sleep over their finances. More than one-in-four Canadians
(27 per cent) are up at night worrying about paying off their debt, followed
by nearly one-in-five (18 per cent) who worry about having enough for
retirement and 16 per cent who worry about having no emergency fund. The survey
also found that one-in-three (34 per cent) were not confident about any
aspect of their financial situation.
More Canadians believe the national economy will worsen over the next 12
months (20 per cent in March compared to 13 per cent in February).
Alberta
vs. Quebec
In response to California USA vs.
Ontario Canada - Which State (Province) Is In Worse Shape? Canadian Banks vs.
US Banks Comparison several people sent me articles
on Quebec.
Please consider Quebec: A poor
little rich province
After
Alberta's finance minister, Ted Morton, delivered a deficit budget last
month, he vowed to visit university campuses and tell students, "You and
your parents are spending a bunch of money to help Quebec, and they're paying
half the tuition you are."
Not only do Quebecers pay less tuition, they also pay far less for
electricity, drugs and daycare. Quebec offers a more generous parental leave
program than elsewhere, and higher corporate subsidies.
"I don't think there is any place in the world panicking as much on the
question of debt as Quebec," said economist Louis Gill. The reason for
this, as Quebec prepares to unveil another deficit budget March 30, is
simple: it is Canada's most indebted province.
Its debt is at 94 per cent of its gross domestic product, just ahead of
Japan, Italy and Greece, whose debts exceed their GDP, according to numbers
calculated by the provincial finance ministry.
After Ontario and Quebec skewered the lucrative oilsands at the Copenhagen
climate-change summit in December, Premier Ed Stelmach pointed out Alberta
paid $21 billion more than it got back from Ottawa during the worst economic
downturn since the 1930s. "That cannot continue," he warned.
He was talking about equalization, the program that ensures public services
are at a comparable level across the country. Quebec, a net recipient of
federal funds, is its largest beneficiary at $8.5 billion.
"There is a sense of emergency," said task force member Pierre
Fortin, a University of Quebec at Montreal economist. "People have
become more fearful of public indebtedness than before."
Quebec's gross debt stood at $151 billion last fiscal year, or 49.9 per cent
of its GDP. It will rise to 53.5 per cent this year. That compares to 30.1
per cent for Ontario and 4.2 per cent for Alberta.
According to the OECD measure, which includes Quebec's share of the federal
debt, it's at $286 billion, even as the province offers services that others
do not.
For instance, Quebec has instituted a $7-a-day daycare system. Another Quebec
benefit: everyone pays less for electricity because of a government decree
placed upon Crown-owned Hydro-Québec.
Even with higher income taxes, families in Quebec have it so good that
University of Sherbrooke economist Luc Godbout co-authored a book in 2008
called Quebec: A Paradise for Families?
Quebec's families hold on to much more of their income than those in other
provinces because of government transfers and cheap daycare, Godbout found.
"Quebecers choose to have a level of services way above their
means," said task force member Claude Montmarquette, president of
economic research group CIRANO.
Quebecers have a
level of services way above their means. The rest of Canada pays the price.
In regards to worrying about debt, it's a bit late now. As happened with
buyers of Florida condos in 2005-2006, most Canadians recently buying
property, especially condos, will soon find out how hard it is to escape an
illiquid investment in a market with no buyers.
Mish
GlobalEconomicAnalysis.blogspot.com
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