The Canadian Taxpayers Federation parked its Debt Clock truck on Parliament Hill this week, three days before the federal budget, and the numbers on it are not subtle. The federal debt is past $1.3 trillion and climbing by about $179 million a day, or roughly $2,000 every second. That works out to about $32,700 for every person in the country. The CTF first rolled out the clock in the 1990s, the last time Ottawa let borrowing run this far ahead of it. Ottawa eventually got that debt under control by cutting spending.
The figure that matters most is not the total but what it costs to carry. Ottawa expects to pay $58.7 billion in interest on the debt this year. That is more than the $57.4 billion it sends the provinces through the Canada Health Transfer, and more than the $53.4 billion it collects through the GST. Every dollar of GST a Canadian pays at the till, and then some, goes to bondholders before it reaches a single program. The Parliamentary Budget Officer has called interest the government’s fastest-growing expense. It also buys nothing: no hospital beds, no soldiers, no tax relief.
The borrowing is not slowing down either. The Spring Economic Update projected another $65 billion in new borrowing this year, and the government has offered no date for a balanced budget. Ottawa has been running deficits for so long that they have stopped looking like a policy choice. Yet every year of new borrowing adds to an interest bill that future budgets cannot avoid, at whatever rates the bond market sets when the debt rolls over.
Wednesday’s budget is the Carney government’s chance to show it takes this seriously. A credible plan would set a date to balance the books, put limits on program spending growth and stop announcing new commitments without saying what they replace. Franco Terrazzano of the CTF put the ask more bluntly: put down the credit card. If the budget does not, the Debt Clock will keep running, along with the interest bill that comes with it.
