With interest rates at a 20-year high, the cost of borrowing has spiked from $20.3 billion in 2020-21 to $46.5 billion in this fiscal year. Carrying the debt is expected to cost the federal treasury $60.7 billion in 2028-29, according to Canada’s fall economic statement. Jimmy Jean, chief economist at Desjardins, and Armine Yalnizyan, the Atkinson Fellow on the Future of Workers, weigh in.
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Canada’s debt costs are expected to rise to $60.7 billion in 2028-29, according to the latest federal update. This represents a significant increase from the previous projection of $37.8 billion for the same period.
The rise in debt costs can be attributed to a number of factors, including increased borrowing by the federal government to fund pandemic relief measures and economic stimulus programs. The government has incurred significant debt in order to support individuals, businesses, and communities affected by the COVID-19 pandemic.
According to the federal update, Canada’s total federal debt is projected to reach $1.46 trillion in 2028-29, up from the previous projection of $1.41 trillion. This increase in debt is expected to result in higher debt-servicing costs for the government, as it will need to pay interest on the additional borrowed funds.
The rising debt costs highlight the challenges that the government will face in managing its fiscal position in the coming years. The increase in debt-servicing costs will put additional pressure on the federal budget, potentially limiting the government’s ability to invest in other priorities such as infrastructure, healthcare, and social programs.
Furthermore, the rise in debt costs could also have implications for Canadian taxpayers. With higher debt-servicing costs, the government may need to consider implementing measures to generate additional revenue, such as tax increases or spending cuts. This could have an impact on the overall financial well-being of individuals and businesses across the country.
The federal update on Canada’s debt costs serves as a reminder of the importance of prudent fiscal management and the need for a sustainable approach to government spending and borrowing. While the pandemic has necessitated significant government intervention to support the economy and the population, it is crucial for the government to carefully consider the long-term implications of its borrowing and spending decisions.
As the government navigates the challenges posed by rising debt costs, it will be important for policymakers to carefully assess the trade-offs involved in different fiscal strategies. Balancing the need for continued economic support with the imperative of ensuring fiscal responsibility and sustainability will be key in charting a path forward for Canada’s economy and finances.
In conclusion, Canada’s debt costs are expected to rise to $60.7 billion in 2028-29, reflecting the significant impact of pandemic-related borrowing and spending. The government will need to carefully manage its fiscal position in the coming years in order to address the implications of higher debt-servicing costs and to ensure the long-term financial health of the country.
This all can be sourced to Steven Harper’s tax cuts for big corporations. Under Martin Canada was on its way to paying down the debt. Electing conservatives always has long lasting, disastrous consequences.
I don't think it is a big deal at all. Justin Trudeau can always raise tax to 99% and take over all the money and the whole economy into federal government.
socialists never fail. they love spending other people's money.
Will Canada give another billion of taxpayers money to Ukraine?
Did this so called economist just say cutting taxes at provincial municipal levels is adding to inflation? While Trudeau a spending isn’t?
No wonder cbc isn’t taking seriously
60 billion each and every year for eternity…. Your children will pay tax to cover these interest payments and hand down that bill to their kids…. not money for hospitals and schools just interest payments for ever thanks to PM Blackface and those who vote liberal and NDP coalition. The budget will balance itself.
Nope,,, $80 + billion debt by 2030,,, it doesn't take a rocket scientist too crunch the number's…
Time to propose some solutions, you critics. It's easier to complain than it is to create.
Trudeau doesn't have a solution to the problem he had created in the first place. What can you expect from a drama teacher turned politician?????? NOTHING.
Too little, too late Trudeau and Freeland. Taxpayer's are paying more now towards the deficit caused by this wasteful and incompetent government than we are on Healthcare.
All of this spending and yet Canadians still struggle to heat their homes, feed their families, and find affordable housing. I think every Canadian is wondering where all of this spending has gone? It certainly hasn’t gone to improving the quality of life for Canadians and improving our aging infrastructure. There’s no valid reason to boast about spending and “programs,” while criticizing the Conservatives proposals to reign in spending, when you have absolutely nothing of substance to show for your outrageous spending spree.
Anarchy corruption in the Canadian government watch the parliament Channel pay attention people very dangerous times we live in
Gold is just a rock… not "green" to mine to put in a vault underground. The mental gymnastics required to follow this logic is absurd. I'll take XRP thanks. Perhaps, just survey the minerals in the ground or asteroids and then leave them in the ground and space if not required for manufacturing, then issue their "value" on the xrp ledger? Not to mention, just give Ukraine an xrp so that they can issue their own fiat currency without a carbon credit pyramid scheme of socialism green slush funds, if we "cared" about the people of Ukraine qnd not the corrupt noney launderinggoing on, we would offer digital sovereignty in a digitaleconomyand not financial enslavement with maid targeted advertising and censorshipby the human rights commission? Not to mention masks have become the "headcovering" of the globalists plot, as masks have quickly become the worst environmental disaster of the century. Not to mention the health and psychosocial aspect of Philip Zimbarbo en masse.
The CBC once again is intentionally misleading Canadians .
Inflation in Canada was caused by the BoC increasing the M2 money supply by $600 Billion over 3 years ,
much of this printed money was used to pay for Trudeau's and Freeland's out of control spending ,
AND this printed money ended up in circulation .
There is a 12 to 24 month delay between money printing and the inflation it causes .
Also , the US M2 money supply peaked in June 2022 , while the Canadian M2 money supply continued to increase .
As a result , the Cdn dollar went from $0.796 to $0.73 US . As oil , natural gas , lumber , wheat , zinc , copper etc
are sold in the US dollar , Canadians ended up spending more to buy these .
.
balanced budgets are such a joke these days. All the countries are living on borrowed money and for some weird reason it seems to be working for now. until it doesn't and then we'll have a fabulous crisis….
Interest rates are at historic lows Glen
Desardas Group Building Complex , is located pretty close to Trudeau's riding of Papineau in Montreal .
Well at least the CBC wasn't interviewing someone from SNC .
.
Anyone remembering smug Trudeau lecturing journalists on the “historically low interest rates” they paid on debt …
First comment was that spending is quite restrained in this update. Not really, we are already running a huge deficit, spending was already out of control, just not being exasperated more.
Canada, the next Greece…
How is it Canada doesn't require new people coming into the country to afford a roof over their heads and a job. Its important they aren't an immediate financial burden.
Immigrants shouldn't qualify unless its under a emergency need like for Ukrainians
Liberal/NDP failure in all it's glory. Noone can dispute this now.
Why should government have to fix anything. People have to start taking responsibility of their situation. If you dont want to improve your life no government ever can.
Freeland is expecting growth from all the companies hiring imigrants but those imagrant have no affordable housing and the new programs anounced will take 2 yrs to take effect.
Only the CBC can say they’ve “restrained spending” when the deficit is $50b and servicing our debt is soon to be bigger than healthcare and our military. Keep up the smoke show cbc. You’re doing our country proud.
$61 billion in interest costs. That’s just money out the door. We have to cut spending and pay down some of this debt!
Liberal/ NDP screwed this country so bad and Canadian are suffering. People should go street and Justin to resign immediately
We are led by a pedant who openly says that he doesn’t think about monetary policy supported by an FM whose background involves no business or finance but journalism. Is it any surprise that we are in such a disaster?
Time to grab some of the record profits from the grocery stores!!!
How much is being sent to WEF
Hav much do you have say banialuki to working hard canadians??????
stop steeling money ++++ komunizm liberals ???????
Some people use the word "invest" too freely if you are not getting direct returns, it is spending
Restrained. Is that what CBC thinks. 40 billion dollars every year.
The most frustrating part about the Liberal spending is the we have little to no results!
Shameful.
How far we have fallen since Stephen Harper had not only balanced the budget but paid down some of Canada's debt. This Liberal government spends like a bunch of drunken sailors. Their windfall in revenues is due to their carbon tax implementation, which has done much to drive inflation. The debt drives inflation and interest rate hikes. The Liberals are destroying this country and pushing Canada towards recession. Canada is lagging MILES behind the US economically. There is no question that we need a Federal Election soon, and these Liberals need to go. The word "incompetent" just does not fully describe this government.
Who does Freeland think she has fooled as well as the rest of the head-bobbing/hand-clapping Liberals? Theirs is a disastrous gov't since the beginning of JT's mandate as PM which is full of WEF globalists who have determined to sabotage our country. Deception is the name of their game with the complicit mainstream media trying to make them look good.
She is right. We just bring more people and also throw some money at the problem rather than fixing it. We cannot survive for long by bringing in people who work 3-4 minimum wage jobs. If the housing is affordable may be we can trap them but the more unaffordable housing is the high invome earners would just leave.
The Trudeau Liberal reckless spending, while at the same time saying they have any modicum of fiscal restraint, is obvious gaslighting.