Staggering Costs of Canada’s Debt Interest

The latest findings from the Fraser Institute reveal that the interest on Canada’s government debt will set each citizen back by thousands of dollars this year. Brace yourselves—this year's total debt interest payments are projected to reach a jaw-dropping $92.5 billion, translating to between $1,937 and $3,432 per Canadian, depending on where you live.

Deficit Spending: A Growing Concern

As Canadian governments continue to lean toward deficit spending, the burden of debt keeps rising. Jake Fuss, director of fiscal studies at the Fraser Institute, summarized the situation bluntly: "The more that governments spend on interest, the less funding is available for essential services that Canadians rely on."

Ottawa's Eye-Watering Debt Servicing Costs

In 2024/2025 alone, Ottawa is expected to allocate $53.8 billion just for servicing its debt. To put this into perspective, that’s significantly more than the total budget for the Canada Child Benefit and the Canada-wide Early Learning and Child Care benefit combined, which stands at $35.1 billion. Even more shocking is that this debt servicing cost surpasses the Canada Health Transfer payments to provinces, which are estimated at $52.1 billion.

Provincial Breakdown: Who’s Paying the Most?

When dissecting debt costs by province, Newfoundland and Labrador tops the list with an astounding $3,432 in federal and provincial interest costs per resident. Following closely is Manitoba at $2,868 per person. British Columbia and Ontario aren’t far behind, with costs of $2,242 and $2,064, respectively. On the flip side, Alberta enjoys the lowest interest costs at $1,937 per person.

Interest Payments vs. Public Services

The study reveals that Ontario, Quebec, and Alberta's combined interest expenditures—$38.4 billion, $23.0 billion, and $9.5 billion, respectively—are roughly equivalent to their planned spending on K-12 education this year. This alarming trend raises questions about the sustainability of such debt accumulation.

The Bottom Line: A Costly Future Ahead

Tegan Hill, co-author of the study and director of Alberta Policy Studies for the Institute, warned: "Governments across Canada continue to rack up massive debts, imposing significant costs on citizens." With substantial interest payments diverting funds from essential services, the financial strain on Canadians may only grow heavier in the years to come.