authorizing new borrowing, has elicited the usual relieved sighs of “let’s never do that again.” Alas they surely will do that again – the current deal expires in 2025 – not just once but over and over.
All of which might suggest that any such legislated limit on borrowing is, by its nature, a bad idea. Isn’t this the sort of thing best left to the discretion of those in government? Why tie their hands? We elect them. If we don’t like their decisions, about debt or anything else, we can always replace them.
The case for some kind of legal limit on public borrowing makes much the same appeal to democratic principle that might have been marshalled against it. But it applies a broader definition of democracy than simply “whatever the legislature happens to vote at any given moment.” Third: provinces that take on debt are making decisions that may have consequences for other provinces, whether via interest rates, or the exchange rate, or in perceptions of their creditworthiness. Yet these other provinces have no say in their decisions.