Slide Deck E: International Comparisons

Deficit A deficit occurs when you have a negative budget balance or when expenditures exceed revenues. The deficit per person is calculated by dividing the total deficit amount by a country’s population. Governments sometimes chose to have a deficit to try to boost the economy during slower economic times. Typically this spending or investment includes infrastructure, creating jobs, which in turn helps the government collect more tax money. In theory, these deficits would be paid for by an expanded economy during the boom that might follow.

Employment rate The Organization for Economic Co-operation and Development (OECD) defines the employment rate as the employment-to-population ratio. This is a statistical ratio that measures the proportion of the country's working-age population (ages 15 to 64) that is employed. A person is considered employed if they have worked at least 1 hour in gainful employment in the most recent week.

Youth unemployment rate The unemployment-to-labour force ratio for those between 15-24 years of age. An unemployed person is defined as someone who does not have a job but is actively seeking work. Youth unemployment rates are historically double the adult rate of unemployment.

International Comparisons – Deficit and Employment Country Deficit Deficit per person Unemployment Youth Unemployment Canada $18.1 billion (CAD) $493 5.8% 11% US $779 billion (USD) $2,396 3.7% 8.3% China $104 billion (USD) $80.28 3.8% 10.8% India $62.5 billion (USD) $48.13 3.5% 12.9 % Mexico $22 billion (USD) $170.54 3.6% 7.3% Spain $44 billion (USD) $936.17 14.5% 34.3% UK $25 billion (USD) $379 4% Canada: Deficit: (2018) https://www.cbc.ca/news/politics/federal-budget-2018- main-1.4552933 (projected deficit – fall economic statement will be released on Nov 21) Unemployment: (2018) https://tradingeconomics.com/canada/unemployment-rate Youth Unemployment: (2018) https://tradingeconomics.com/canada/youth-unemployment-rate US: Deficit: (2018) : https://www.cnn.com/2018/10/15/economy/us-budget- deficit/index.html Unemployment: (2018) https://tradingeconomics.com/united- states/unemployment-rate Youth Unemployment: (2018) https://tradingeconomics.com/united- states/unemployment-rate China: Deficit: (2018) http://www.chinadaily.com.cn/a/201807/16/WS5b4c5482a310796df4df6 b4a.html Unemployment: (2018) https://tradingeconomics.com/china/unemployment-rate Youth Unemployment ( 2017) https://fred.stlouisfed.org/series/SLUEM1524ZSCHN India: Deficit: (2018) https://economictimes.indiatimes.com/news/economy/finance/india-is- being-thrifty-in-good-news-for-budget-gap- goal/articleshow/65252396.cms Unemployment: (2018) https://tradingeconomics.com/india/unemployment-rate Youth Unemployment (2017) ttps://tradingeconomics.com/india/unemployment-rate Mexico: Deficit: (2017) https://www.cia.gov/library/publications/the-world- factbook/fields/2056.html Unemployment: {2018) https://tradingeconomics.com/mexico/unemployment-rate Youth Unemployment: (2017) https://www.theglobaleconomy.com/Mexico/Youth_unemployment/ Spain: Deficit: https://tradingeconomics.com/spain/government-budget Unemployment (2018) https://tradingeconomics.com/spain/unemployment-rate Youth Unemployment rate: (2018) https://tradingeconomics.com/spain/youth-unemployment-rate United Kingdom: Deficit: 19.9 billion pounds converted to 25 billion USD @ conversion rate: $1 = 0.7669 pounds https://uk.reuters.com/article/uk-britain- economy-budget/uk-budget-gap-shrinks-but-leeway-still-limited-for- hammond-idUKKCN1MT131 Unemployment: (2018) https://tradingeconomics.com/united- kingdom/unemployment-rate Youth Unemployment: (2018) https://tradingeconomics.com/united- kingdom/unemployment-rate https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN0 5871 Deficit per person calculated by: deficit divided by the country’s population

National debt When you have a deficit, you need to borrow money to cover the difference between your expenditures and revenue. The money that a government borrows and does not repay becomes its debt. The debt per person is calculated by dividing the debt by a country’s population. Governments borrow money from citizens, domestic institutions holding federal bonds, treasury bills, and have other forms of debt.

Debt-to-GDP ratio Gross domestic product (GDP) is the total value of goods produced and services provided in a country during one year. The debt-to-GDP ratio is a measure of a national government’s debt in relation to its GDP. By comparing what a government owes to what it produces, the debt-to-GDP ratio indicates the government's ability to pay back its debt. The Organization for Economic Cooperation and Development (OECD) encourages countries to aim for a debt-to-GDP ratio below 50.

International Comparisons – Debt and GDP Country National debt Debt per person Debt-to-GDP ratio Canada $1.1 trillion (CAD) $32,968 60.67 % US $21 trillion (USD) $65,724 107.91% China $5.2 trillion (USD) $3,770 46.05% India $1.2 trillion (USD) $783 45.94% Mexico $512 billion (USD) $4,558 48.77% Spain $1.4 trillion (USD) $30,713 109.07% UK $2.4 trillion (USD) $36,072 85.04% Canada National Debt: https://www.nationaldebtclocks.org/debtclock/Canada https://www.cbc.ca/news/politics/federal-market-debt-1.4590441 US National Debt: https://www.nationaldebtclocks.org/debtclock/unitedstates https://www.weforum.org/agenda/2017/10/this-is-how-much-debt-your- country-has-per-person/ China: National debt: https://www.nationaldebtclocks.org/debtclock/china India: National debt: https://www.nationaldebtclocks.org/debtclock/india Mexico: National debt: https://www.nationaldebtclocks.org/debtclock/mexico Spain: National Debt: https://www.nationaldebtclocks.org/debtclock/spain United Kingdom (UK) National Debt: https://www.nationaldebtclocks.org/debtclock/unitedkingdom

Discussion Questions How do Canada’s finances compare to other countries around the world? Are there other countries with stronger economies and job prospects than Canada? What is the most attractive country to live or work in long-term?