Dear John,

I’m Jake Fuss, the Director of Fiscal Studies at the Fraser Institute.

One of the most valuable things we do here is shed light on claims that would often otherwise go unchecked.

In other words, we expose misleading political talking points!

Here is just one example…

After already racking up nearly $950 billion in debt during his tenure Prime Minister, Justin Trudeau’s fall economic update forecasts $271 billion more in total debt by 2027/28 than what was in the spring budget.

Despite this, Prime Minister Trudeau claims his government has “a responsible fiscal track”.

His reasoning? Canada has the lowest net debt-to-GDP ratio among G7 countries.

When you extend the analysis to a broader set of 33 developed countries, Canada’s net debt ranks sixth lowest at 14.6% of GDP.

Sounds good, right? Not so fast…

To calculate net debt, you subtract a government’s financial assets from its total debt, with the implicit assumption that those assets could be used to offset debt.

But here’s the problem: the financial assets used to calculate Canada’s net debt include the Canada and Quebec Pension Plans (CPP and QPP).

Assets in the CPP and QPP are needed to provide pensions for current and future retirees in Canada. Therefore, Canadian governments cannot presumably draw from these assets to offset government debt without compromising the plans’ ability to meet obligations to pensioners!

Put more simply, this calculation doesn’t show how much debt we’re really in.

This is not a problem other countries face.

A better measure of Canada’s indebtedness, compared to other countries, is to compare gross general government debt to GDP.

When comparing Canada’s gross general government debt-to-GDP with the same 33 developed countries, Canada falls to 27th out of 33.

And at 106% of GDP, Canada’s gross debt is also higher than debt levels in Germany and the U.K., meaning Canada doesn’t rank best among G7 countries.

Conclusion: Trudeau’s statement is very misleading. In reality, Canada’s government debt is high relative to other comparable countries.

John, this is just one small example of the clarity we bring to public discourse in Canada.

I’m happy to report that a recent op-ed on this exact topic got widespread coverage in the media. It appeared in 14 newspapers and was viewed by hundreds of thousands of people on social media.

Needless to say – we don’t accept government funding for our research!

If you agree that giving Canadians the facts and numbers they need to hold their politicians accountable is important, I’d like to ask you to please consider making a donation today.

Every dollar donated goes towards bringing our work to even more Canadians. (And you get a tax receipt at tax time, too!)

Thank you so much for your support.

Sincerely,

Jake Fuss
Director, Fiscal Studies
The Fraser Institute