by Joe Durocher
When speaking on Federal Debt it is easy for people to lose interest quickly, which I can understand. When you begin talking about numbers that are into the hundreds of Billions and Trillions it is hard for most of us to really grasp the magnitude of those kinds of numbers, but it is imperative that we try because our federal debt impacts not only us personally, but all of our kids, grandchildren and all future generations.
Our federal debt in Canada is out of control. Our federal debt is around $700 Billion net or $1.2 Trillion total.
We spend over $26 Billion dollars a year just paying interest to service our debt. We spend approximately $80 Million dollars a day paying interest on our total debt.
In 2018 Canada ran a $19 Billion dollar deficit. If we were not paying $26 Billion towards interest payments we could have had all the same services plus have had a $7 Billion dollar surplus.
Imagine what extra services we could give with an extra $80 Million dollars a day. Instead we just hand it over and watch it disappear, receiving nothing in return.
In a recent BNN Bloomberg article, a major credit rating agency, Fitch Ratings Inc. is warning Ottawa that sustained deficits will make Canada more vulnerable to an economic downturn.
“Canada’s gross general government debt, combining federal and provincial fiscal accounts, is higher than other AAA rated sovereigns, except the U.S., and remains close to a level that is incompatible with AAA status,” the report said.
Norman Levine, managing director of Portfolio Manager Corp., in an interview with BNN Bloomberg said: “In Canada, you have a government that’s a tax and spend government with no signs of ever changing that – they just keep moving the goal post further out. But in Canada, the bigger risk I think is some of the provinces are in even worse financial shape than the federal government.”
When we hear and read these things, it should be a warning bell to us all. We can’t continue to sustain the deficits we are running. As citizens we need to make our deficits and debt an important issue with our elected officials.
If we are to be serious about giving future generations any chance we need to get serious about the national debt. If we continue on this path, then we will see taxes and fees continue to rise while getting less services for what we are paying for.