October 18, 2012 - MLI's latest study, Provincial Solvency and Federal Obligations, by author Marc Joffe, is in the Financial Post, The Globe and Mail, CBC News, Wall Street Journal, and Toronto Sun. It is also being talked about on radio and television shows across the country!
The study concludes that the threshold for a provincial default is an interest to revenue ratio of 25%. With current low interest rates, none of the provinces appear to be at risk of reaching this level in the near term. At the longer end of the spectrum, defaults become much more likely.
Ontario would be the most vulnerable. The study calculates the province's default probability would reach 42.9% over 20 years and 79.3% for 30 years. Alberta's default probability would rise to 42.4% and 84.0%, respectively. Quebec's default probability, meanwhile, would be 8.1% and 28.2%, respectively.
Radio and TV coverage:
MLI's Philip Cross will appear on CBC's Lang and O'Leary Exchange today at 7 PM ET to discuss the paper (click here for video) and on QR77 radio's Calgary Today with Angela Kokott at 7:45 pm ET. Tomorrow, Friday, October 19, he will appear on CTV's Afternoon Express with Todd van der Heyden and Amanda Blitz (click here for video).
Also on tomorrow's lineup, Philip will be on Radio Canada's Le Café Show in Alberta at 9:30 am ET. Marc Joffe will appear on CBC's World Report in the morning (CBC Radio One) followed by Philip on KYK 95.7 Radio X in Quebec at 4:15 pm ET. You can also catch Marc on the Roy Green radio show at 4:30 pm ET on Saturday, October 20. Tune in on the Corus Radio Network. If you miss these interviews, Marc will be on the Rutherford radio show on Monday, October 22 at 12 pm ET and Philip will be on Talk Radio AM640 in Toronto with Jeff McArthur on Tuesday, October 23, 2012.
Upcoming: MLI's Philip Cross on CKRO radio in New Brunswick to discuss the study on October 30, 2012.
Print media coverage:
"Risks of eurozone-like debt crisis exist in Canada: report" by Gordon Isfeld, Financial Post, October 18, 2012 (republished in the Ottawa Citizen)
"Some Canadian provinces lurching toward 'unsustainable finances,' study" by Michael Babad, The Globe and Mail, October 18, 2012
"Alberta, Ontario face EU-style debt crisis, report warns," CBC News, October 18, 2012
"Study Warns on Provinces' Finances" by Paul Vieira, Wall Street Journal's Canada Real Time, October 18, 2012
"Euro-style financial crisis could happen in Canada: Think-tank," Toronto Sun, October 18, 2012 (republished in cnews and the London Free Press)
"Canada may have to cut economic outlook: Flaherty," Financial Post and Reuters, October 18, 2012
"Canada Provincial Debt: Eurozone-Style Crisis Could Hit If Provinces Don't Take Finances In Hand, Report Warns" by Daniel Tencer, Huffington Post Canada, October 18, 2012
"Economic think tank forecasts potential debt crisis in Alberta's future" by Bill Kaufmann, Calgary Sun, October 18, 2012
"20-year risk of debt default greatest in Ontario: study" by Brent Jang, The Globe and Mail, October 18, 2012
"May have to cut growth projections, Flaherty says" by Julian Beltrame, The Globe and Mail, October 18, 2012 (republished in the Edmonton Journal)
"Tories reject debt-default report from Macdonald-Laurier Institute" by James Wood, Calgary Herald, October 19, 2012
"Finances publiques : l'Alberta plus vulnérable que le Québec!" Les News, October 18, 2012
"Solvabilité des provinces : le Québec plus solide que l'Ontario et l'Alberta," La presse, October 19, 2012
"Le Québec moins à risque" by Mélanie Loisel, Le Journal de Montréal, October 18, 2012
"Le Québec moins à risque d'un défaut de paiement," Canoe News, October 18, 2012
"Finance minister ponders downgrade of Canada's economic growth," Vancouver Sun, October 18, 2012
"Loonie lower as finance minister warns economic forecast may have to be revised" by Malcolm Morrison, 680 News, October 18, 2012
"Are Alberta and Ontario really going bankrupt" by Mike Moffatt, The Globe and Mail, October 19, 2012
"The bond market's questionable leap of faith" by David Parkinson, The Globe and Mail, October 19, 2012
"The young Alberta is not so young" by Erica Alini, Macleans, October 19, 2012
"Getting Canada's house in order" by Bob Plamondon, Ottawa Citizen, October 24, 2012
"B.C.'s spending could come back to bite us in the future" by Don Cayo, Vancouver Sun, October 28, 2012