Fraser Institute says the government will spend more on interest payments than employment benefits
As millions of Canadians stress about their own finances, the eyewatering extend of Canada’s federal government debt has been highlighted in a new report.
Fraser Institute economist Jake Fuss says that Ottawa’s spending on debt interest payments will be $24.4 billion in fiscal year 2019-20. That means it will pay out more to service its debt than it will for employment benefits ($19 billion) and this year’s projected payments for Canada Child Benefit ($24.1 billion).
“Since the 2008-09 recession, the federal debt has increased by more than $260 billion, and taxpayers are on the hook for the increased interest costs,” said Jake Fuss, Fraser Institute economist and co-author of Interest Costs and their Growing Burden on Canadians.
Fuss says the combined federal and provincial governments’ debt burden will cost each Canadian more than $1,000 this year on average. Those in Newfoundland & Labrador will pay the most ($3,343) while British Columbians will pay the least ($1,156).
Ottawa’s interest payments alone will swallow up 7.2% of federal revenues for 2019-20, working out as $642 per Canadian.
“In their upcoming budgets, the federal and provincial governments can address these interest costs by ensuring balanced budgets by better controlling government spending,” Fuss said.
