Fraser Institute report reveals the outsized share that under 35s will pay due to the national debt accumulation
In a world that often appears to be built on debt, some ask why the amount the Canadian government owes matters.
Of course, with any debt there is a cost of servicing or repayment, and for the national debt that means a burden on every taxpayer. But this is not usually an equal share of the burden across all sectors of the population.
When looking at the current and forecasted federal debt accumulation, a new study from the Fraser Institute calculates that there will be $332.5 billion in borrowing to be paid back.
And the burden will not be equally shared across age groups, with younger Canadians (aged 16-35) facing a far greater share – almost 62% or $205.1 billion – in personal income taxes over their lifetimes.
Breaking that down to an average tax burden for each individual, those aged 16-25 now will pay an extra $24k, those aged 46-55 will pay around one third of that, and the over 75s will pay less than $1k.
Of course, those with longer to live will pay more, but the study aims to highlight why a growing federal debt mountain disproportionately impacts younger people.
“Today’s deficits are tomorrow’s taxes so it’s important for Canadians, particularly younger Canadians, to understand how these deficits and rising debt levels will affect their lives in the future,” said Jake Fuss, senior economist at the Fraser Institute and co-author of Lifetime Tax Burden for Canadians from Federal Debt Accumulation. “When policymakers in Ottawa spend beyond their means, racking up more debt in the process, they’re handing the bill for current spending to future generations.”