Canadians will pay up to $3,348 this year on government debt interest, study finds - National Post
A chart from the Fraser Institute shows the amount of money spent by Canadians on federal and provincial debt interest payments. Photo by Handout /The Fraser InstituteArticle contentA new study from the Fraser Institute says that every Canadian this year will pay hundreds or even thousands of dollars to service the interest on federal and provincial debt, with Newfoundlanders and Manitobans paying the most, and Albertans the least.
“For more than a decade, deficit spending and growing government debt have become a trend for many Canadian governments,” says the report, authored by Jake Fuss, director of Fiscal Studies at the Fraser Institute. “In 2025/26, the federal government and all ten provinces are projected to record deficits.”
It notes that combined federal and provincial net debt is expected to reach a record high $2.4 trillion in 2025/26. “It is expected this trend will continue for the foreseeable future, as every province and the federal government project that they will continue running deficits in 2026/27.”
Get a dash of perspective along with the trending news of the day in a very readable format.
A welcome email is on its way. If you don't see it, please check your junk folder.
The next issue of NP Posted will soon be in your inbox.
We encountered an issue signing you up. Please try again
This amounts to an expected $94.4 billion spent on interest payments in 2025/26 by the federal and provincial governments.
“Residents in Newfoundland & Labrador face by far the highest combined federal-provincial interest payments per person: $3,348,” the report notes. “Manitoba is the next highest at $2,816 per person.” The lowest amount is in Alberta, where it amounts to $1,845.
More than half of those costs come from the federal government, which will spend a projected $54 billion on debt servicing charges in 2025/26, roughly equivalent to the $54.7 billion the government will spend on the Canada Health Transfer, and far more than it spends on childcare benefits ($38.1 billion).
Fuss told National Post that those kinds of comparisons are useful to illustrate to Canadians the size of the problem of government debt payments.
“If we’re spending this money on interest costs, that’s money that’s not going towards those programs you care about, like education, health care, pensions, things like that,” he said. “And ultimately we are basically spending the same amount or more on interest costs than we are spending on K-to-12 education, for instance.”
