A new study by the Fraser Institute has ranked Canada as having the second-highest spike in debt accumulation from 2019 to 2021 out of 33 other developed nations. 

Canada sat only behind Japan for the amount of debt increase relative to gross domestic product. 

According to Fraser Institute economist Tegan Hill, despite the serious amount of debt taken on by governments in Canada, the economy actually underperformed. 

“Despite Canada’s comparatively high debt accumulation during the pandemic, which many argued would result in strong economic performance, we actually underperformed most of our peers,” said Hill in a press release

The study relied on data provided by the International Monetary Fund (IMF) which stated during that period, Canada’s gross debt-to-GDP retio spiked by nearly a quarter from 87.2% in 2019 to 112.1% in 2021. 

Although governments heaped on debt, economic growth lagged behind.

When it comes to how much the economy actually grew, Canada came in 23rd out of the same countries with an inflation-adjusted growth of -5.2%. 

“It’s interesting to note that despite the borrowing by Canadian governments, particularly Ottawa, our recession in 2020 was deeper and our recovery in 2021 weaker than most other industrialized countries,” said Hill. 

“Clearly, Canada’s significant debt-financed spending didn’t translate into a comparatively strong economy during the pandemic.”

Canada’s record on unemployment was also lacklustre with Canada reporting the third-highest rate totalling in at 9.6% in 2020. 

Meanwhile, the United States economy fared much better despite also taking on a large amount of debt. 

Canada’s neighbours to the south outperformed Canada on both economic growth and unemployment. 

“For the United States, real GDP growth fell in the middle in both years, ranking 15th highest in 2020 and 13th highest in 2021,” the report states. 

According to an April 2022 report by the IMF, Canada’s GDP forecast projected that the economy would only grow by 3.9% – 15% lower than the 2021 projection.