Federal and Provincial net debt to pass $1.1 trillion mark
Canadian Federation of Independent Business (CFIB) Economics estimates that Canada's federal and provincial net debt will symbolically pass the $1.1 trillion mark just after 11pm on October 3. It had reached $1 trillion in late spring of 2010, so in a matter of less than a year and a half, debt levels of the two most senior levels of government have gone up another 10 per cent or $100 billion. $635 billion is debt that is the result of federal borrowing, while $465 billion is the total net amount owed by provincial and territorial governments.
CFIB vice-president and chief economist Ted Mallett said, "On a per capita basis, the combined debt amounts to just above $31,850 per person," Individuals in Quebec face the highest government debt at $38,725, followed by Ontarians at $35,550 and Newfoundlanders at $35,040. Lowest debt levels per capita are seen in Alberta ($14,700) and the Yukon ($14,900).
"As lofty as it seems, net debt is not at record levels once one accounts for price inflation and population growth. Expressed in today's dollars, per capita net debt at one time topped $37,500 in the mid '90s, before being whittled down to roughly $26,000 by 2008," said Mallett.
On its current course debt levels will continue to get worse before they get better. It won't be until mid-decade before federal and provincial debt levels are expected to fall, and then only if economic conditions are favourable. "It's time for governments across Canada to get more serious about controlling and reducing debt. Being blasé about debt is the road to Greece and it's not fair to our kids because today's debt is tomorrow's taxes," concluded Laura Jones, CFIB's sr. vice-president research and economics.
Full and up-to-the-second results for net debt figures for Canada and the provinces can be seen by following CFIB's new online debt clock.
These estimates are based on the most recently available federal and provincial budget projections and population estimates compiled by CFIB. They are simple straight-line projections from March 31 fiscal year-end figures, which at this point remain preliminary. Actual debt levels day-by-day cannot be pinned down precisely because they also depend on the timing of government revenues and expenditures, which will vary considerably throughout the year and depend on economic performance. It is quite possible that we passed the $1.1 trillion mark months ago, or the cross-over may be months away, depending on how the economy performs.
