Study
| EST. READ TIME 2 MIN.Canada’s debt ranking falls from best in G7 to 7th worst of 32 advanced countries when total debt is measured
- The federal government continues to rationalize its debt-financed spending based on international comparisons showing Canada with the lowest level of debt in the G7.
- Of the two broad measures of debt, gross debt includes most forms of debt while net debt is a narrower measure that accounts for financial assets held by governments.
- By using net debt as a share of the economy (GDP), Canada ranks 5th lowest of 32 countries and lowest amongst the G7. By using gross debt as a share of the economy, Canada falls to 26th of 32 countries and 3rd lowest in the G7.
- Canada experiences the largest change in its indebtedness ranking—falling 21 places—when the measure shifts from net debt to gross debt.
- One reason for this pronounced change in ranking is that net debt includes the assets of the Canada and Quebec Pension Plans, which have unique approaches to funding public retirement plans: unlike most other industrialized countries, the CPP and QPP invest in non-government assets including equities and corporate bonds.
- As of December 31, 2023, according to Statistics Canada data, there were net assets in the com¬bined CPP and QPP of $716.7 billion.
- According to IMF data, the difference between Canada’s gross and net debt was approximately $2.7 trillion at the end of 2023, which means the assets of CPP and QPP explain more than one-quarter of the difference.
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Jake Fuss
Director, Fiscal Studies, Fraser Institute
Jake Fuss is Director of Fiscal Studies for the Fraser Institute. He holds a Bachelor of Commerce and a Master’s Degree inPublic Policy from the University of Calgary. Mr. Fuss has written commentaries appearing in major Canadian newspapers including the Globe and Mail, Toronto Sun, and National Post. His research covers a wide range of policy issues including government spending, debt, taxation, labour policy, and charitable giving.… Read more -
Milagros Palacios
Director, Addington Centre for Measurement, Fraser InstituteMilagros Palacios is the Director for the Addington Centre for Measurement at the Fraser Institute. She holds a B.S. in IndustrialEngineering from the Pontifical Catholic University of Peru and a M.Sc. in Economics from the University of Concepcion, Chile. Ms. Palacios has studied public policy involving taxation, government finances, investment, productivity, labour markets, and charitable giving, for nearly 10 years. Since joining the Institute, Ms. Palacios has authored or coauthored over 70 comprehensive research studies, 70 commentaries and four books. Her recent commentaries have appeared in major Canadian newspapers such as the National Post, Toronto Sun, Windsor Star, and Vancouver Sun.… Read more -
Callum MacLeod