As federal and provincial spending reaches record levels, Canadians are footing an increasingly large bill to service the public debt.
According to a report from the Fraser Institute measuring how much Canadians are paying to service federal and provincial debts, the average taxpayer contributes thousands of dollars per year to pay off government debt at all levels.
In total, Canadians are expected to spend $81.8 billion in debt service payments with the lion share of the debt coming from the federal government.
The federal government is expected to pay $46.5 billion in payments on the national debt, accounting for 10.2% of the federal government’s revenues. For context, the federal government will spend $49.4 on the Canada Health Transfer – a major component of Canada’s healthcare funding scheme.
Per-person expenditures on the combined federal-provincial debt are the worst in Newfoundland and Labrador by far, as the average taxpayer in the maritime province will pay $3,225 in taxes to help pay off the federal and provincial governments’ debts. Interest payments on the provincial debt in Newfoundland and Labrador will cost $1.05 billion, or 10.6% of the province’s revenue.
Residents of Canada’s two largest provinces face some of the highest government debts in the country, as per-person expenditures on government debt for Ontario and Quebec’s residents will reach $2,048 and $2,323 respectively in 2024.
The Ontario government is expected to spend $13.4 billion on paying off government debt in the 2023/24 fiscal year, $1 billion more than what the province is expected to spend on post-secondary education.
Furthermore, payments on the debt are expected to grow at an average annual rate of 7% from 2022/23 until 2024/25, a greater increase in spending than is expected for healthcare expenditures during the same period.
In Quebec, residents are expected to pay $20.3 billion in combined provincial-federal debt payments, slightly more than what the province spends on K-12 education.
The government of Alberta is not off the hook either, as debt service payments have grown substantially in the past decade since the government incurred substantial debts under the NDP government.
While Albertans only spent $776 million on servicing the debt in 2015-16, the government is expected to spend $3.2 billion on debt payments this fiscal year.
Other provinces saddled with significant debt burdens include Manitoba, Prince Edward Island, and Nova Scotia.
While governments across Canada continue to expand their budgets and burden taxpayers with the cost of growing debt service payments, affordability for the average Canadian has not seen a corresponding amelioration.
Since 2015, the average price of a home in Canada has rapidly increased and Canadians are finding it increasingly difficult to make ends meet as food inflation has consistently remained above 4% since 2021.
