Fraser Institute News Release: Canada’s debt ranking falls from best in G7 to 7th worst of 32 advanced countries when total debt is measured
15 Agosto 2024 - 4:00AM
Canada’s relative debt position is much worse than the federal
government suggests when a larger group of advanced countries are
included and total debt—not just net debt—is measured, finds a new
study released today by the Fraser Institute, an independent,
non-partisan, Canadian public policy think-tank.
“The federal government is very quick to point out that the
country’s net debt relative to the size of the economy (GDP) is
lowest in the G7, but Canada’s true debt position is much worse
than Ottawa lets on,” said Jake Fuss, director of fiscal studies at
the Fraser Institute and co-author of Caution Required When
Comparing Canada’s Debt to that of Other Countries,
2024.
The study finds that Canada’s relative debt position, instead of
being the best of the G7, falls significantly when total debt is
measured instead of measuring debt after adjusting for financial
assets. Net debt, which is the measure used by the federal
government, offsets a part of the country’s total debt by including
financial assets.
Specifically, Canada ranks 26th of 32 developed countries for
its total (gross) debt as a share of the economy. In other words,
Canada’s total debt relative to GDP is the 5th highest in the G7
and 7th highest amongst the industrialized world (32 advanced
countries).
The reason Canada’s debt position declines so dramatically when
total debt—and not net debt—is measured is because net debt
includes the assets of the Canada Pension Plan and the Quebec
Pension Plan, which unlike the public pension programs of other
developed countries invests in non-government assets such as stocks
and bonds.
As of December 2023, the combined assets of the CPP and QPP,
some $716.7 billion, represented more than one-quarter of the
difference between Canada’s total debt and net debt.
“The government cannot use the assets of the CPP and the QPP to
repay its debt, so it is disingenuous to include those assets in
Canada’s debt calculations,” Fuss said.
“Canada is not the low-debt jurisdiction that Ottawa suggests,
and Canadians should be aware of the true state of the country’s
indebtedness.”
MEDIA CONTACT:Jake Fuss, Director of Fiscal
Studies Fraser Institute
To arrange media interviews or for more information, please
contact:Drue MacPherson, Fraser Institute(604) 688-0221 ext.
721drue.macpherson@fraserinstitute.org
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The Fraser Institute is an independent Canadian public policy
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Calgary, Toronto, and Montreal and ties to a global network of
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