Public Pensions And Net Debt — Brian Romanchuk

Some Canadian conservatives were predictably angry last week when the Federal Liberal government highlighted Canada’s relatively low net debt. They want to instead focus on the gross debt, which moved in a different direction. (The figure above shows the gross and net financial liabilities of the “general government” — includes provincial governments. Canadian provincial governments have a big economic footprint, and in order for the debt figures to be comparable to international peers, you want to look at the general government. Otherwise, the Canadian government looks to be a misleadingly small part of the economy…

I do not have time to dig into all of the sources of the divergences between gross debt and net financial liabilities, but I want to discuss one that was raised — the role of public sector pension funds. My old employer was the Quebec public asset manager that has a long history, and the Canadian Federal government created its own in 1997, and has grown to a very large size (by the standards of the Canadian market)....

Bond Economics
Public Pensions And Net Debt
Brian Romanchuk