In the 2021 Canada Day Debt Report, the Canadian Taxpayers Federation (CTF) found the provincial and federal governments are up to their eyeballs in debt.
According to recent government budgets, government debt ranges between $47,300 and $65,200 per Canadian depending on the province by the end of 2021. When you add up all provincial and federal debt, each Canadian will owe $57,500 on average.
"Governments have been borrowing too much money for too long and now they need to start addressing the red ink before taxpayers get clobbered," said Franco Terrazzano, the Federal Director for the CTF. "Canadians don’t have tens of thousands of dollars lying around to pay for this mountain of government debt, and that’s why it’s so important for politicians to find savings like everyone else."
Debt interest charges will cost between $1,100 and $2,400 per person this year.
"Interest charges alone will cost more than $1,000 per person this year, and that money isn’t being spent on health care or lowering taxes because it’s going to bond fund managers," said Terrazzano. "Canadian governments are up to their eyeballs in debt and taxpayers are going to get walloped if politicians don’t figure out ways to save money."
Between 2017-2022, Alberta experienced the largest 5-year provincial debt increase in the federation at 138 percent at $115.8 billion. The typical Albertan taxpayer now owes $58,200 in combined provincial and federal debt. The Alberta government has also accumulated a 5-year provincial interest cost of $10.8 billion.
"The Alberta government has been on the runaway spending train for more than a decade now," said Terrazzano. "The province has been struggling through the downturn for more than five years now so we need politicians to save some money because struggling families and businesses can't afford higher taxes."
"Families and businesses have tightened their belts and we need politicians to do the same."
The federal government saw the next highest 5-year debt increase at 84 percent at $122 billion. The typical Canadian now owes $32,200 in federal debt and have accumulated $112 billion in interest costs over the past five years.
The Fraser Institute previously warned the federal government could accumulate interest costs of $34.9 billion in 2021 - 2022, an increase of $13 billion if interest costs return to 2019 - 2020 levels — their lowest — of two percent.
"If interest costs increase, governments across Canada could see their already large budget deficits grow even larger," said Frasier Institute senior economist Jake Fuss.
The federal government produced massive deficits in succeeding years — $381.6 billion last year and $363.4 billion the current year — spending $17,091 per Canadian last fiscal year.