Per capita figures (i.e. per person) for the 1995/96 fiscal year, for someone living in Edmonton:
| Government of... | debt | interest | spending | surplus (deficit) | population |
|---|---|---|---|---|---|
| Canada | 19,500 | 1,800 | 3,000 | (1,200) | 28,000,000 |
| Alberta | 9,800 | 700 | 4,300 | 120 | 2,600,000 |
| Edmonton | 300 | 25 | 1,500 | 60 | 700,000 |
| Total | 30,000 | 2,500 | 9,000 | (1,000) |
These are all extremely rough estimates, obtained by dividing total numbers by population. Assuming that they're approximately correct, we spend 2,500 on interest and 9,000 on public services, out of an average income of 28,000 (GDP per capita). We pay about 10,500 in taxes, and borrow about 1,000 to make up the difference.
In other words, we're spending about 30% of our income on public services and about 10% for interest on the debt. (Note that taxpayers who own government bonds -- i.e. people who lent us money -- will be receiving some of this interest, but not all of it, because some was borrowed from foreign investors.)
Is 30% still too high? If so, what's a reasonable number? 25%? 20%? Or is 30% too low? Do we want to increase it to 35%? 40%?
I'd be interested in seeing similar numbers for Canadian cities in other provinces. I don't think the numbers are too different; total government debt is supposedly above 700 billion, which is an average of 25,000 across the country.
I'm also curious as to whether I've gotten the estimates right. The "Tax Freedom Day" announced by the Fraser Institute every year usually falls after the middle of the year, which suggests that we're paying more than 50% of GDP in taxes (i.e. more than 14,000 per person, instead of my estimate of 10,500). I don't think that's right; maybe they're basing it on taxation at a particular income level.
Here's the per capita figures for the 1997/98 fiscal year, for someone living in the city of Vancouver:
| Government of... | debt | interest | spending | surplus (deficit) | population |
|---|---|---|---|---|---|
| Canada | 19,300 | 1,400 | 3,000 | 0 | 30,300,000 |
| B.C. | 7,400 | 250 | 5,000 | (200) | 3,900,000 |
| Vancouver | 500 | 150 | 1,000 | 0 | 500,000 |
| Total | 27,200 | 1,800 | 9,000 | (200) |
So we're still spending roughly 30% of our income on public services and 10% (somewhat less) on interest, but we're only borrowing $200 each year instead of $1000, and that should continue to drop.
I have to say that I'm pretty impressed with Paul Martin for balancing the federal budget, and with Canadian voters for accepting the spending cuts required. Of course, if the global economic turmoil causes a recession in Canada, keeping public finances balanced is going to be much more painful.