When we think of public debt, our thoughts often jump directly to the United States — when we’re not thinking of the sovereign debt crisis in Europe. And, while Canada doesn’t have the same debt problems of the United States, we could head that direction if we’re not careful. Already, our expenses exceed the revenue we bring in. Indeed, for 2010-11, Canada spent $33.4 billion more than the country brought in. As a result, the current federal debt is at $582 billion, and it’s growing.
As you can see from the infographic below, the federal debt in Canada grows by $57.8 million each day. That’s a lot of money, and it can start to add up. Remember that our federal debt is money that we owe, so we have to pay interest on it as well. The United States is almost to the point where it has to borrow more money to meet the interest on the obligations that it has already borrowed for. If we aren’t careful, we could see something similar in Canada.
For now, a lot of the debt (78%) is held by Canadians in the form of citizens and organizations that hold federal bonds, as well as Treasury bills. These investments can provide Canadians with a low risk way to invest their money — and invest in their country. And, of course, countries often need to issue bonds of this nature in order to ensure smooth operations. However, fiscal responsibility requires that revenues equal the amount borrowed in order to avoid deficit. Canada’s government spending is starting to move away from these ideals, and deficit spending is becoming the norm. Look over the infographic below to see how much public debt Canada has, and see what is happening with the money. The more we know, the better able we will be to influence policymakers to get us back on track so that we can avoid the fate of eurozone countries, and the United States.