Last week, the provincial government updated their Term Debt Issues document, which lists all the term debt they still have outstanding. I thought it’d be interesting to go through it and review some of the outstanding debt from various perspectives.
The government updated the document because they traded a new 10-year government bond on 23 July for $1.15 billion. The total outstanding term debt now sits at $88,910,348,000, split between 205 debts.
Keep in mind that the above total outstanding amount includes currencies other than Canadian dollars, so the actual amount owing is likely higher. Let’s do some conversion:
|Currency||Term debt||Canadian dollar|
|South African rand||$750,000,000.00||$60,995,992.50|
Sure enough, the total debt owed is about $4.5 billion higher once converted into Canadian dollars. Granted, this converted amount will fluctuate as the above currencies change in price.
Now let’s look at how long it is until the debts mature. First the number of debts:
We can see here that about a quarter of the debts will mature in just the next 5 years (some of them as early as next month), about two-thirds within the next 10 years, and over three-quarters within the next 20 years.
(That thin orange slice is is only 1 debt, and the light blue one is 3.)
Now, the amount of debts.
Debts with a maturity date within the next 10 years make up over two-thirds of the total debt count, and account for over $60 billion of the debt. If we extend it 20 years, it’s roughly three-quarters and over $66 billion.
(11–20 years makes up $3.944 billion, 31–40 years $200 million, and 40–100 years $700 million.)
Since we know the number of debts and the total amounts, we can determine the average amount per debt.
|up to 5 years||$630,535,176|
Keep in mind that the 31–40 years debt is only 1 debt.
Now let’s look at debts by which party was in power when the debt was traded.
Of the debts that are still outstanding, nearly half of them were traded during the NDP’s time in office.
If we add up the amounts of those debts, we see that a larger amount of debt outstanding was traded during the NDP term than during either the PC or UCP’s time in office (granted, the UCP have been in office for only a little over a year). In fact, the debt purchases between 2015 and 2019 account for over half (55.9%) of the total debt outstanding.
Interestingly, the above two charts show that the UCP have traded half as many debts (both in quantity and in total combine value) as the NDP did, but in roughly only a quarter of the time. So, while the NDP traded about twice as much debt as the UCP has, they took 4 years to do it—the UCP took just 1 year.
If we look at average value per debt taken under each party, we find that the NDP and UCP are pretty neck and neck.
However, as I mentioned before, the UCP have been in power for just a little over a year. Is it fair to compare their (so far) 1-year term to the NDP’s 4-year term?
Let’s compare the first year of both parties.
Combined, the parties traded 55 new term debts in their first year, with the UCP trading nearly 70% of them. The collective total of these term debts is about $21 billion, with about the same proportion traded by the UCP during their first year, as seen below.
That being said, if we look at the average value of each debt traded, we see that the ones traded during the NDP’s first year had a higher average value than the ones traded during the UCP’s first term, but just barely.
So given that the UCP traded the most debts in their first year, it makes sense that the total amount traded in their first year would be higher. Because of their higher average value, had the NDP traded the same number of debts in their first year as the UCP had, they probably would’ve had a higher total value traded.
Now, keep in mind that the some of the UCP debts were traded during the pandemic and the oil market crash, so maybe it’s not a fair comparison (even though the NDP’s first year was in the middle of a recession).
So, how about we look at, say, the first 8 months of each term? For the UCP, that puts them to December 2019—before the pandemic, before low oil prices, before the economy tanked.
So, now the tables have turned—sort of. The total number of debts traded drops by more than half: from 55 to only 24, with the majority having been traded by the NDP.
When we look at the combined value of the term debts traded during the first 8 months of each party’s term, we find that despite trading a larger quantity of debts, the NDP didn’t trade the most debt.
The UCP did.
The UCP traded a combined $5.343 billion in their first 8 months, compared to the $4.489 billion that the NDP traded. That’s an average of $534 million per term debt under the UCP, compared to the $321 million that the NDP averaged.
So, while it’s true that about 80% of the term debt traded by the UCP occurred in 2020, they still incurred nearly $5.5 billion in traded term debt just in 2019 alone. That’s almost $1 billion more than the NDP had traded during their first 8 months.
Putting the pandemic and oil market crash aside, if the UCP continued on the same trajectory that they were on during 2019—before the pandemic and the crash—they would have traded term debts totalling $53,965,400,900 by the end of their first term in 2023.
The NDP traded $49,724,000,000 during their term.
That means the UCP would’ve not only traded as much term debt in their first term as the NDP did in theirs, but they would’ve traded more term debt than the NDP: $4 billion more.
And remember, that’s not including debt incurred in 2020.
Oh, and did I mention that the only 100-year term debts currently owed were traded under the UCP? $300 million in March 2020, $300 million in April 2020, and $100 million this month. They don’t mature until June 2120.
My unborn grandchildren will likely be born, grown, and dead before those 100-year term debts are paid off.
I guess we’ll see where we sit in 2023.
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