A recent study by the Fraser Institute found that interest payments over the last year on all government debt amounted to $62.8 billion, costing approximately $1,752 per Canadian. This would mean the government debt cost a family of four just over $7,000 in interest last year.
Provincial and Federal government debt combined amounts to $1.4 trillion, an increase of over half a trillion dollars since 2007/08.
Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of The Cost of Government Debt in Canada, 2017, said “It’s not a choice—interest must be paid on government debt, and the more money governments spend on interest payments, the less money is available for the programs and services that matter to Canadians.”
A projected deficit of $25.1 billion
The study revealed that in 2015/16, the amount spent on primary and secondary education cost approximately the same as interest payments by all levels of government.
The federal government’s projected deficit of $25.1 billion is almost equivalent to interest payments on the federal debt alone.
“Governments across Canada are racking up large debts with no end in sight and this imposes real costs on Canadians. Interest payments are substantial and take money from other important priorities, such as social programs or tax relief,” he said.