Business
Canada’s debt ranking falls from best in G7 to 7th worst of 32 advanced countries when total debt is measured
From the Fraser Institute
By Jake Fuss, and Milagros Palacios and Callum MacLeod
Canada’s relative debt position is much worse than the federal government suggests when a larger group of advanced countries are included and total debt—not just net debt—is measured, finds a new study released today by the Fraser Institute, an independent, non-partisan, Canadian public policy think-tank.
“The federal government is very quick to point out that the country’s net debt relative to the size of the economy (GDP) is lowest in the G7, but Canada’s true debt position is much worse than Ottawa lets on,” said Jake Fuss, director of fiscal studies at the Fraser Institute and co-author of Caution Required When Comparing Canada’s Debt to that of Other Countries, 2024.
The study finds that Canada’s relative debt position, instead of being the best of the G7, falls significantly when total debt is measured instead of measuring debt after adjusting for financial assets. Net debt, which is the measure used by the federal government, offsets a part of the country’s total debt by including financial assets.
Specifically, Canada ranks 26th of 32 developed countries for its total (gross) debt as a share of the economy. In other words, Canada’s total debt relative to GDP is the 5th highest in the G7 and 7th highest amongst the industrialized world (32 advanced countries).
The reason Canada’s debt position declines so dramatically when total debt—and not net debt—is measured is because net debt includes the assets of the Canada Pension Plan and the Quebec Pension Plan, which unlike the public pension programs of other developed countries invests in non-government assets such as stocks and bonds.
As of December 2023, the combined assets of the CPP and QPP, some $716.7 billion, represented more than one-quarter of the difference between Canada’s total debt and net debt.
“The government cannot use the assets of the CPP and the QPP to repay its debt, so it is disingenuous to include those assets in Canada’s debt calculations,” Fuss said. “Canada is not the low-debt jurisdiction that Ottawa suggests, and Canadians should be aware of the true state of the country’s indebtedness.”
- The federal government continues to rationalize its debt-financed spending based on international comparisons showing Canada with the lowest level of debt in the G7.
- Of the two broad measures of debt, gross debt includes most forms of debt while net debt is a narrower measure that accounts for financial assets held by governments.
- By using net debt as a share of the economy (GDP), Canada ranks 5th lowest of 32 countries and lowest amongst the G7. By using gross debt as a share of the economy, Canada falls to 26th of 32 countries and 3rd lowest in the G7.
- Canada experiences the largest change in its indebtedness ranking—falling 21 places—when the measure shifts from net debt to gross debt.
- One reason for this pronounced change in ranking is that net debt includes the assets of the Canada and Quebec Pension Plans, which have unique approaches to funding public retirement plans: unlike most other industrialized countries, the CPP and QPP invest in non-government assets including equities and corporate bonds.
- As of December 31, 2023, according to Statistics Canada data, there were net assets in the combined CPP and QPP of $716.7 billion.
- According to IMF data, the difference between Canada’s gross and net debt was approximately $2.7 trillion at the end of 2023, which means the assets of CPP and QPP explain more than one-quarter of the difference.
Business
Taxpayer watchdog calls Trudeau ‘out of touch’ for prioritizing ‘climate change’ while families struggle
From LifeSiteNews
The prime minister told a G20 panel this week that fighting so-called ‘climate change’ should be more important to families than putting food on the table or paying rent.
Canada’s leading taxpayer watchdog blasted Prime Minister Justin Trudeau for being completely “out of touch” with everyday Canadians after the PM earlier this week suggested his climate “change” policies, including a punitive carbon tax, are more important for families than trying to stay financially afloat.
In speaking to LifeSiteNews, Canadian Taxpayers Federation (CTF) federal director Franco Terrazzano said Trudeau’s recent comments show his government “continues to prove it’s out of touch with its carbon tax.”
“Canadians don’t support the carbon tax because we know it makes life more expensive and it doesn’t help the environment,” Terrazzano told LifeSiteNews.
Terrazzano’s comments come after Trudeau told a G20 panel earlier this week that fighting so-called “climate change” should be more important to families than putting food on the table or paying rent.
Speaking to the panel, Trudeau commented that it is “really, really easy” to “put climate change as a slightly lower priority” when one has “to be able to pay the rent this month” or “buy groceries” for their “kids,” but insisted that “we can’t do that around climate change.”
Terrazzano said that the Trudeau government’s carbon tax in reality “impacts nearly all aspects of life in Canada by making it more expensive to fuel up our cars, heat our homes and buy food.”
“The carbon tax also puts a huge hole in our economy that we can’t afford,” he said to LifeSiteNews, adding that if Trudeau really wanted to help Canadians and “prove it understands the struggles facing Canadians,” then it should “scrap the carbon tax to make life more affordable.”
On Thursday, Trudeau, who is facing abysmal polling numbers, announced he would introduce a temporary pause on the federal Goods and Services Tax (GST) for some goods.
Conservative Party of Canada leader Pierre Poilievre this afternoon said about Trudeau’s temporary tax holiday that if he is serious about helping Canadians, he would cut the carbon tax completely.
People’s Party of Canada (CPC) leader Maxime Bernier called the move by Trudeau a cheap trick to try and “bribe” Canadians, noting that it will not work.
“What a ridiculous gimmick. Bribing Canadians temporarily with borrowed money,” Bernier wrote.
“When the real solution is to stop growing the bureaucracy, cut wasteful spending, stop sending billions to Ukraine, eliminate subsidies to businesses and activist groups, stop creating new unsustainable and unconstitutional social programs, eliminate the deficit, and THEN, cut taxes for real. None of which he will do of course.”
As reported by LifeSiteNews, a survey found that nearly half of Canadians are just $200 away from financial ruin as the costs of housing, food and other necessities has gone up massively since Trudeau took power in 2015.
In addition to the increasing domestic carbon tax, LifeSiteNews reported last week that Minister of Environment Steven Guilbeault wants to create a new “global’ carbon tax applied to all goods shipped internationally that could further drive-up prices for families already struggling with inflated costs.
Not only is the carbon tax costing Canadian families hundreds of dollars annually, but Liberals also have admitted that the tax has only reduced greenhouse gas emissions by 1 percent.
From the Fraser Institute
This year’s COP wants to fast-track the world’s transition to “clean” energy, help vulnerable communities adapt to climate change, work on “mobilizing inclusivity” (whatever that means) and “delivering on climate finance,” which is shorthand for having wealthier developed countries such as Canada transfer massive amounts of wealth to developing countries.
Every year, the United Nations convenes a Conferences of Parties to set the world’s agenda to reduce greenhouse gas (GHG) emissions. It’s the biggest event of the year for the climate industry. This year’s conference (COP29), which ends on Sunday, drew an army of government officials, NGOs, celebrities and journalists (many flying on GHG-emitting jet aircraft) to Baku, Azerbaijan.
The COP follows a similar narrative every year. It opens with a set of ambitious goals for climate policies, followed by days of negotiating as countries jockey to carve out agreements that most favour their goals. In the last two days, they invariably reach a sticking point when it appears the countries might fail to reach agreement. But they burn some midnight oil, some charismatic actors intervene (in the past, this included people such as Al Gore), and with great drama, an agreement is struck in time for the most important event of the year, flying off to their protracted winter holidays.
This year’s COP wants to fast-track the world’s transition to “clean” energy, help vulnerable communities adapt to climate change, work on “mobilizing inclusivity” (whatever that means) and “delivering on climate finance,” which is shorthand for having wealthier developed countries such as Canada transfer massive amounts of wealth to developing countries.
Some of these agenda items are actually improvements over previous COPs. For example, they’re actually talking about “climate adaptation”—the unwanted stepchild of climate policies—more this year. But as usual, money remains a number one priority. As reported in the Associated Press, “negotiators are working on a new amount of cash for developing nations to transition to clean energy, adapt to climate change and deal with weather disasters. It’ll replace the current goal of $100 billion (USD) annually—a goal set in 2009.” Moreover, “experts” claim the world needs between $1 trillion and $1.3 trillion (yes, trillion) in “climate finance” annually. Not to be outdone, according to an article in the Euro News, other experts want $9 trillion per year by 2030. Clearly, the global edifice that is climate change activism is all about the money.
Reportedly, COP29 is in its final section of the meta-narrative, with much shouting over getting to a final agreement. One headline in Voice of America reads “Slow progress on climate finance fuels anger as COP29 winds down.” And Argus News says “climate finance talks to halt, parties fail to cut options.” We only await the flying in of this year’s crop of climate megafauna to seal the deal.
This year’s conference in Baku shows more clearly than ever before that the real goal of the global climate cognoscenti is a giant wealth transfer from developed to developing countries. Previous climate conferences, whatever their faults, focused more on setting emission reduction targets and timelines and less about how the UN can extract more money from developed countries. The final conflict of COP29 isn’t about advancing clean energy targets or helping vulnerable countries adapt to climate change technologically, it’s all about show me the money.
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