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Dear John,
As you probably heard, the inflation rate in Canada recently hit a 30-year high, prompting the Bank of Canada to raise its policy interest rate in April and again in June.
And more rate hikes possible before the end of the year!
A new Fraser Institute essay out today finds that these rate hikes will also increase government interest costs. And with the federal government continuing to borrow money to fund high levels of spending, the cost of servicing Ottawa’s growing debt is poised to increase even further.
A second essay also released today finds notes the similarities between today’s federal fiscal situation and the mid-1990s. Back then, interest costs consumed one of every three dollars of revenue, and the government enacted major reforms — including spending reductions — to help dramatically reduce the federal debt.
Check out both essays here, and help us spread the word on social media!
Sincerely,
Niels Veldhuis
President
The Fraser Institute
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