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Dear John,
The $39.8 billion deficit expected by Ottawa in 2024/25 represents the 17th consecutive annual federal deficit, with continued deficits expected into the foreseeable future.
Continuous annual borrowing by Ottawa to finance increased spending has driven federal total debt from 53% of the economy ($1.1 trillion) in 2014/15 up to an expected 69.8% ($2.1 trillion) in 2024/25.
To put this into perspective, the Fraser Institute published a study today that shows what a median family’s household finances would look like if they were to spend and borrow like the federal government in 2024.
It finds that a median family would already be $427,759 in debt – and continuing to borrow!
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It would spend $109,982 while only earning $101,821, meaning that it would borrow $8,161 just to pay for its normal spending.
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This $8,000-plus in additional debt is on top of the $427,759 in existing debt the family would already hold based on previous borrowing.
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$11,066 of the family’s income – almost 11% – would be spent on just the interest costs of existing debt.
And consider this: in most households, debt is often offset by assets such as a home or investments. But the federal government has little in the way of assets to offset its enormous debt.
It’s also important to note that this government debt burden on Canadian families does not include provincial and municipal government debt!
Check out the full study here, and be sure to share this one on social media.
Sincerely,
Niels Veldhuis
President
The Fraser Institute
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