Combined Federal and State Government Debt Projected to Exceed $2.1 Trillion This Year: Study

According to a new report, Canada’s combined federal and provincial net debt in the 2022-2023 financial year is expected to exceed $2.1 trillion, almost double what it was 15 years ago.

“Rising budget deficits and debt are the serious financial problems facing the federal government and many state governments these days.” the report said Written by Jake Fuss, Associate Director of Financial Studies, Fraser Institute.

“Since 2007-08, combined net federal and state debt (adjusted for inflation) has nearly doubled from $1.1 trillion to an estimated $2.1 trillion in 2022-23.”

Fass said that between the pre-pandemic fiscal years 2019-20 and 2022-23, the combined federal and state debt to gross domestic product (GDP) ratio fell from about 66% to It said it is expected to increase to about 75%. percent.

“Furthermore, the federal and state governments are expected to accumulate a combined net debt of $395.9 billion (inflation-adjusted) between 2019/20 and 2022/23, an increase of 23.4%.” he added.

Nova Scotia ranks in the highest category of all states with a combined federal and state debt to GDP ratio of nearly 93%.

When combined state and federal debt per capita, Newfoundland & Labrador has the highest percentage of over $64,500 per capita, followed closely by Ontario at nearly $60,000 per capita .

Alberta ranked the lowest of all provinces in both categories, with a combined federal and provincial debt to GDP ratio of about 44% and a total debt per capita of less than $43,000.

“Government debt growth is not confined to a few states or one level of government,” Fuss writes, adding that between 2007 and 2023, the real He added that debt levels had risen.

federal debt

The study follows another study authored by Fuss and published by the Fraser Institute in July 2022 that found that Canada’s federal debt per capita has fallen by 35% since the Trudeau administration took office in 2015. We found an increase of over 100%, from $34,791 to $47,070 per person.

The same survey found that Prime Minister Justin Trudeau had the third-highest accumulated federal debt during his tenure of any prime minister since World War II.

“Emergency spending was needed due to COVID, but the massive increase in federal debt in recent years means more tax dollars will be used to pay interest, leaving future generations responsible for spending today. I’m here.

Congressional Budget Officer (PBO) Yves Giroux said in a November report that the federal debt burden is expected to reach $53 billion by 2024, while Canada’s debt service ratio, public debt burden to tax revenue, is You wrote that it is predicted to exceed 14%. same year.

“Debt costs will increase by an average of $5.6 billion annually from 2023-24 to 2027-28,” Giroux wrote.Risk scenario analysisreport, published November 10, 2022.

The Canadian Taxpayers Federation (CTF) also said in August, using data from the PBO’s office, that the federal government is unlikely to balance the budget for at least 20 years, and only given lenient projections. Found it.

Andrew Chen and Isaac Teo contributed to this report.

peter wilson

Peter Wilson is a reporter based in Ontario, Canada.