Canada's debt is soaring: Warning of a threat to the economy

 

 

 

Economists say that the debt of the federal and provincial governments in Canada is increasing rapidly. It is estimated that the country's total debt may soon reach 100 percent of GDP. That is, reports indicate that the debt is becoming equal to the size of the country's entire economy.

The country's total debt, which was $1.21 trillion in 2007/08, has doubled in just two decades. It will reach $2.3 trillion by the 2025/26 fiscal year. Canada's pattern of borrowing so much began with the global financial crisis in 2008. Since then, governments have continued to spend more money than they earn.

Rising interest rates make it more expensive to repay debt. A large part of the government's money is spent just on interest payments. With the huge amount of money spent on interest, there has been a decrease in funds provided to sectors such as health and education. Economists warn that excessive debt will affect the country's ability to deal with emergencies and that people will have to bear a heavy tax burden to pay off debt in the future.

Large provinces such as Ontario and Quebec have the highest debt burden. The Fraser Institute has stated that the country cannot afford to continue to increase debt at the current rate. Experts suggest that excessive spending should be controlled and governments should balance their budgets.