In Canada, the Province of Quebec created a generations fund in 2006 in order to reduce the debt.

As of March 2023, Québec’s net debt stands at $206.8 billion, or 37.4% of GDP..

Do you know if any other country or state uses this approach?

  • $\begingroup$ Do we like what? $\endgroup$
    – smcc
    Oct 11 at 18:27
  • $\begingroup$ The idea of a generations funds to reduce the debt? $\endgroup$ Oct 11 at 19:26
  • $\begingroup$ @DenisPageau-Sociétalogue for the future on this site opinion based questions like “do you like x” or “do you think y” are off topic on this site. Questions here should be always answerable using facts theories or scientific research on this site… questions of the type do you like x cannot be answered scientifically or with facts or research. I saw that Giskard already edited your answer to fix it, please next time avoid that kind of questions here . See our help center for our rules or take a tour of the site to understand our model $\endgroup$
    – 1muflon1
    Oct 12 at 8:16
  • $\begingroup$ Why on earth does the Canadian government allow its Quebec province to be in debt? Seems utterly insane for the central gov not to take on those liabilities. $\endgroup$ Oct 13 at 9:04
  • $\begingroup$ Where do you come from Jamie? $\endgroup$ Oct 13 at 12:17

1 Answer 1


The Quebec debt reduction Generations Fund is hilarious...

alternative sources of revenue were chosen that are allocated exclusively to the Fund. The Fund's main revenue source is water-power royalties paid by Hydro-Québec and private producers of hydroelectricity. Other revenue sources are mining revenues, the specific tax on alcoholic beverages, and investment income generated by the Fund itself

The quote is from Wikipedia.

A government has the power to regulate its income and expenses through intentions and policies and law.

A government can create a pocket for money and label the pocket the "Generations Fund" and use its power to try to be faithful to an intention to allocate to that pocket the income from specific sources and with the intention to make expenditures out of that pocket for a specific expense. The specific expense might be interest and principal payments on a specific debt.   Since the government continues to have power to regulate its income and expenses, it also has the power to ensure that it "fails" to live up to its earlier intentions. For example, the government can change intentions and policies and laws or a government can lose an election and be replaced.

If pockets make debt reduction inevitable, then the most indebted people would be wearing the pants that have the most pockets. Since pocket proliferation is funny and governments are a reliable source of comedy, I am sure joke governments other than Quebec's do similar things.

For example the United States Social Security Trust Fund is an example of another pocket. It's funded by social security payroll tax and it pays social security obligations as they occur, which means it's a periodic debt.

The Trust Fund is required by law to be invested in non-marketable securities issued and guaranteed by the "full faith and credit" of the federal government.

The government is saying that the only paper (securities) they will put into this pocket is paper that promises to pay the owner of the paper some amount of money from the issuer of the paper, and by the way, the issuer of the paper also happens to be the owner of the paper. This would be even funnier than what Quebec does if it were not for the fact that people openly talk about how this "fund" is not an actual advance funding of future expenses and it's not even close. I imagine Quebec politicians are earnest so I'm ROTFL.

Multiple pockets are welfare destroying. For example, suppose Taiwan has 2 pockets. One is called the general pocket and the other is called the Mars mission pocket. I am supposing that Taiwan has the ambition to pay for a mission to Mars and the income for the Mars pocket is specifically the revenue from taxing alcohol. If China attacks Taiwan, money from the Mars pocket wouldn't be available for defense of the country. It wouldn't be available because if you can read you would be able to understand that the pocket is clearly labelled "Mars". Thus we can see that multiple pockets destroys welfare because the welfare of the Taiwanese is diminished in such a situation. That would be hilarious although it would be sad if they are invaded. I doubt if this will happen because I am not aware of the government of Taiwan being a big joke like the government of Quebec.

  • $\begingroup$ Thanks for your comments. Through your comments, I now understand why they created the fund and I think that the idea of creating a pocket called generations fund was actually an excellent idea. It has nothing to do per se with the economy, but with transparency. When it was created, the public was really worried about the debt. Hence, by creating the fund, it showed that the government listens to the people .This fund gave the public a better debt monitoring process. $\endgroup$ Oct 13 at 12:34
  • $\begingroup$ The income of the Generations Fund is partly the result of the initial choice to include an alcohol tax and mining royalties. Why do you want somewhat random effects like fluctuations in the success rate of geologists to affect the thing that you want to monitor? Why do you want the Fund's income to be less if people decide alcohol is unhealthy? Monitoring the Generations Fund is inferior to monitoring the debt directly, for example, by measuring the debt / gross provincial product ratio. $\endgroup$
    – H2ONaCl
    Oct 13 at 14:17
  • $\begingroup$ You wrote: "Monitoring the Generations Fund is inferior to monitoring the debt directly." Please remember that I did not say that the government would stop measuring the debt / gross provincial product ratio. Hence I don't understand why you say that it's inferior. How can having two types of informations on the debt be inferior? $\endgroup$ Oct 13 at 14:38
  • $\begingroup$ Problems have already been mentioned. Welfare reduction, random geology and societal lifestyle changes affecting your measurement, and other things that will occur to you if you think about it. If Quebec "wins the lottery" why would you want the debt to be unaffected just because of some earlier decisions about how to reduce it. When circumstances change; make changes. Don't follow silly old rules. If you want to have transparency and debt monitoring, just have transparency and debt monitoring. There is no need to do silly things. $\endgroup$
    – H2ONaCl
    Oct 13 at 15:43
  • $\begingroup$ Maybe economists think this is silly, but I think that when it is time to help citizens understand the various actions on this, it is a useful tool. PS, I sense you do not like government or you fill that they are completely incompetent. To give such an extreme example and think that politicians would not adapt is a form of fallacy and is misleading. $\endgroup$ Oct 13 at 15:47

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