The Moral of Two Scandals — Enron and Ontario

Ontario’s financial debts, as of 2018:

“Ontario’s debt has ballooned to $312 billion, the biggest debt held by a subnational government anywhere in the world. Ontario owes twice as much as California, which has a population bigger than all of Canada.”[1]

Enron’s debts as determined by its bankruptcy proceedings:

“The company paid its creditors more than $21.7 billion from 2004-2011. Its last payout was in May 2011.”[2]

By those measures, Ontario’s indebtedness is the equivalent of fifteen Enrons.

Two morals of the story:

1. Exposure and outrage: Contrast prevailing attitudes toward private- and public-sector incompetence and deceit. Enron’s scandal was publicized everywhere around the world, as it should have been, and it is now a classic teaching case about corporate badness. Ontario’s situation is barely known outside of Canada, and within Canada it’s taken as a normalized dysfunctionality. (Ah well, the government has big debts it can’t repay. Tell me something new.)

2. Solving the problem: Within a few years Enron’s debts were sorted out. Yet no one has a workable plan to solve Ontario’s debts, which will be passed on to successive administrations and generations. (Gives a new meaning to It’s for the children.)

Why the asymmetry?

Sources:

[1] Canada’s National Post.

[2] Investopedia.