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Government debt burden increasing across Canada

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4 minute read

From the Fraser Institute

By Tegan Hill, Jake Fuss and Spencer Gudewill

As governments across Canada unveil their 2025 budgets, outlining their tax and spending plans for the upcoming fiscal year, they have an opportunity to reverse the trend of deficits and increasing debt that has reigned in recent years.

Indeed, budget deficits, which fuel debt accumulation, have become a serious fiscal challenge for the federal and many provincial governments, primarily due to high levels of government spending. Since 2007/08—the final fiscal year before the financial crisis—combined federal and provincial net debt (inflation-adjusted) has nearly doubled from $1.2 trillion to a projected $2.3 trillion in 2024/25. And you can’t blame COVID, as combined federal and provincial net debt (inflation-adjusted) increased by nearly $600 billion between 2007/08 and 2019/20.

Federal and provincial net debt (inflation-adjusted) per person has increased in every province since 2007/08. As shown in the below chart, Newfoundland and Labrador has the highest combined (federal and provincial) debt per person ($68,516) in 2024/25 followed by Quebec ($60,565) and Ontario ($60,456). In contrast, Alberta has the lowest combined debt per person ($41,236) in the country. Combined federal and provincial net debt represents the total provincial net debt, and the federal portion allocated to each of the provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

The combined federal and total provincial debt-to-GDP ratio, an important fiscal indicator that compares debt with the size of the overall economy, is projected to reach 75.2 per cent in 2024/25. By comparison, the ratio was 53.2 per cent in 2007/08. A rising debt-to-GDP ratio indicates government debt has grown at an unsustainable rate (in other words, debt levels are growing faster than the economy). Among the provinces, the combined federal-provincial debt-to-GDP ratio is highest in Nova Scotia (92.0 per cent) and lowest in Alberta (42.2 per cent). Again, the federal debt portion is allocated to provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

Interest payments are a major consequence of debt accumulation. Governments must make interest payments on their debt similar to households that must pay interest on mortgages, vehicles or credit card spending. When taxpayer money goes towards interest payments, there’s less money available for tax cuts or government programs such as health care and education.

Interest on government debt (federal and provincial) costs each Canadian at least $1,930 in 2024/25. The amount, however, varies by province. Combined interest costs per person are highest in Newfoundland and Labrador ($3,453) and lowest in Alberta ($1,930). Similar to net debt, combined federal and provincial interest costs are represented by the total of the provincial and federal portion with the federal portion allocated to each of provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

Debt accumulation comes with consequences for everyday Canadians as more and more taxpayer money flows towards interest payments rather than tax relief or programs and services. This budget season, federal and provincial governments should develop long-term plans to meaningfully address the growing debt problem in Canada.

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2025 Federal Election

The “Hardhat Vote” Has Embraced Pierre Poilievre

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David Krayden's avatar David Krayden

Blue collar and unionized workers are supporting Pierre Poilievre and the CPC

When President Richard Nixon won a landslide in his 1972 reelection, he did so by broadening his own personal popularity and the appeal of the Republican Party to blue collar and unionized workers. It was called the hardhat vote and many working people embraced Nixon because he seemed to be talking the same language as they were. Nixon talked about law and order and getting tough on crime; safer streets and harsher penalties for serious crime. Although unionized workers had traditionally voted for the Democratic Party and seen the Republicans as the party of the wealthy, by 1972 the Democrats had moved far to the left on social issues and were completely out of touch with average Americans who saw Democratic presidential nominee Sen. George McGovern as being soft on crime and approving of the anarchy on the streets.

It’s precisely the language that Conservative Party of Canada leader Pierre Poilievere is speaking in the 2025 federal election. As support for the New Democratic Party has collapsed throughout the election campaign, don’t think most of it is going to the Liberal Party. Poilievre has been targeting blue collar workers for years with his emphasis on the trades and talking about middle class tax cuts and safe streets. A factory or construction worker is middle class and just want an affordable lifestyle for their families. They don’t have a lot of time for the woke underbelly of the Liberals or the NDP and are increasingly reluctant to support either party because both have appealed to elites.

Listen to Karl Lovett, the president of the Local 773 of the International Brotherhood of Electrical Workers, talk about Carney corruption and why he is supporting Poilievre and the CPC in 2025.

“Mark Carney also failed to pay $5 billion in Canadian taxes by hiding his company’s assets in Bermuda above a bike shop. Hard to believe that information comes from Canada’s NDP, or at least who is left of them, because the irony is, Mark Carney has eaten all those people alive. Even the mayor of Lima has warned Canadians not to vote for Mark Carney, and why for ripping him off the poorest of the poor people in Peru. That’s who he ripped off,” Lovett said.

“Listen, there are countless other outrageous examples proving that Mark Carney doesn’t give a damn about the Canadian working man. And now, as prime minister, which he’s not, Carney is promising to put carbon tax and tariff on the auto industry. It’s another rip-off screen that’s right. We’re getting punched by Trump on one side of the border, and Carney plans to punch us on this side of the border, also pretending it’s all about climate change, and now he’s made millions off the workers’ backs. He wants more than money. He wants more power. He wants all of the power to do whatever he wants to do. Mark Carney cannot be trusted with this power. Mark Carney cannot be trusted to protect workers,” Lovett continued.

The union leader told a cheering crowd that “Mark Carney is in it for himself, and when he loses this election, you can bet Mark Carney is going to leave Canada in a New York minute. But there’s hope, there’s hope, there’s our last hope. His name is Pierre Poilievere – the .only hope for Canadian workers. You see Mark Carney fooled Justin Trudeau. We can’t let him keep fooling us.”

“Local 773, which I represent, knows Pierre Poilievre very well. We can proudly tell you that Pierre has our back. Pierre has been putting Canadian people to work and Canadian workers. First, local 773 began working with Pierre Poilievre, the Conservative Member of Parliament Chris Lewis, some years ago, when it became all too clear that the Liberal Party had zero interest in helping out workers. Upon winning the leadership of the party, Pierre made Local 773 his very first priority, he came to my union hall. Pier made the Local 773 Visitor Training Center, and he met all our workers, and he made a pledge to me; he’s not going to turn his back on us, and I believe him,” Lovett said.

Toronto Sun columnist Joe Warmington agreed with me and you can hear that entire interview, below. “Labor wants to work, and they want to, you know, build things, and they want those good, paying jobs, and that’s what Poilievre has always been about, you know.”

“He wants more power. He wants all of the power to do whatever he wants to do. Mark Carney cannot be trusted with this power. Mark Carney cannot be trusted to protect workers,”

“Again, it’s hard to know, but I always felt … and I still think that Poilievre is going to pull this off because of these reasons that you’ve raised today, I never really bought into and again, I’m just one person’s opinion, and I go on the ground. In the air, the polls are saying, I know there’s this main street poll today, maybe it’ll swing differently. But in the air, it says one thing, and on the ground, it says another thing. And that clip you just showed, that’s the ground, that’s where the workers are, that’s where the families are.”

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2025 Federal Election

Poilievre will cancel Mark Carney’s new Liberal packaging law and scrap the Liberal plastic ban!

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From Conservative Party Communications

Conservative Leader Pierre Poilievre promised today that a new Conservative government will stop Mark Carney’s proposed Liberal food tax and scrap the existing Liberal plastic ban. Poilievre will:

  • Stop proposed new labelling and packaging requirements that will raise the cost of fresh produce by as much as 34% and cost the average Canadian household an additional $400 each year.
  • Scrap the Liberal plastics ban, including the ban on straws, grocery bags, food containers and cutlery, and other single-use plastics, letting consumers and businesses choose what works for them.
  • Protect restaurants, grocers, and low-income Canadians from one-size-fits-all packaging rules that disproportionately affect those who can least afford it.

“After the Lost Liberal Decade, many Canadians can barely afford to put food on the table. And now Mark Carney and the Liberals want to make it even harder with a new food packaging law that will raise the price of food–again,” said Poilievre. “A new Conservative government will keep food prices down by scrapping the Liberal plastic ban and stopping Carney’s new Liberal food tax.”

After a decade of out-of-control spending and massive tax increases, families are spending $800 more on food this year than they did in 2024, and food banks had to handle a record two million visits in a single month. In Montreal, 44 percent of CEGEP students are experiencing some form of food insecurity, while places like HawkesburyKingstonToronto and Mississauga have all declared food insecurity emergencies.

And food prices are still rocketing upwards, surging by 3.2% over the last year, with no end in sight. In the last month alone, food inflation increased by 1.9 percentage points—the largest monthly jump in food prices in decades.

As if this wasn’t bad enough, Liberals have made life even more expensive and inconvenient for Canadians by banning plastics – including everything from straws to bags to food packaging. The current Liberal ban on single-use plastics will cost Canadians $1.3 billion dollars over the next decade.

Now Mark Carney wants to make it worse by adding complicated and costly new food packaging rules that will drive up the price of food even more–in effect, a new Liberal food tax. Plastic food packaging makes up 1/3 of all plastic packaging in Canada. The proposed Liberal food tax will cost the average Canadian household an additional $400 each year, waste half a million tonnes of food, decrease access to imported fruit and produce, and increase food inflation. The Chemistry Industry Association of Canada has also warned that this tax will put up to 60,000 Canadians out of work.

“The Liberals’ ideological crusade against convenience has already driven up food prices and the last thing Canadians need is Mark Carney’s new food tax added directly to your grocery bill,” said Poilievre. “The choice for Canadians is clear, a fourth Liberal term that will make food even more expensive or a new Conservative government that will axe the food tax and bring back straws, grocery bags and other items, to make life more affordable and convenient for Canadians – For a Change.”

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