SMALL AND EXPOSED: DEBT ACCUMULATION IN CANADA'S SMALL PROVINCES

Ron Kneebone
unpublished
It hardly takes a shrewd premier to keep a province from racking up debt when economic times are good, and it does not necessarily take a reckless government to accumulate debt when economic times are tough. What matters more, when assessing a government's fiscal responsibility, is how policy decisions-as opposed to cyclical effects-influence a province's debt ratio. With economically small provinces being especially vulnerable to exogenous shocks, the need to avoid chronic deficits and debt
more » ... eficits and debt accumulation is particularly high, since minimizing deficit and debt at least improves the resilience of these provinces to recover from shocks when they do occur.
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