Episode Summary Why does Ontario pay more than Ottawa to borrow the same dollar on the same day? Despite being in the same country and currency, Canadian provinces carry unique structural burdens that make them some of the largest sub-sovereign borrowers in the world. This episode explores why provinces borrow so heavily, how market spreads and basis points measure regional credit risk, and the unwritten, untested federal backstop assumption that holds up the entire provincial debt market.

Key Concepts

• The Constitutional Burden: Under the division of powers, Canadian provinces are responsible for healthcare and education—the two largest spending areas in any developed nation. Consequently, Canadian provinces carry spending responsibilities that sit at the national level in other  ...