Combined federal and provincial government debt interest payments will cost Canadian taxpayers an estimated $92.5 billion in 2024/25, or between $1,937 and $3,432 per person, depending on the province, according to a study released Thursday by the Fraser Institute.
The independent, non-partisan think-tank says the federal government alone will spend $53.8 billion on debt servicing, more than it plans to allocate for the Canada Child Benefit and Canada-wide Early Learning and Child Care program combined ($35.1 billion), and slightly more than the Canada Health Transfer to provinces ($52.1 billion).
Newfoundland and Labrador faces the highest per capita debt interest cost at $3,432, followed by Manitoba at $2,868. Alberta’s combined federal and provincial interest payments are the lowest in the country at $1,937 per person. The report notes that the total interest costs for Ontario ($38.4 billion), Quebec ($23 billion), and Alberta ($9.5 billion) roughly equal the provinces’ projected spending on K-12 education this year.
“Interest must be paid on government debt, and the more money governments spend on interest payments, the less money is available for the programs and services that matter to Canadians,” said Jake Fuss, director of fiscal studies at the Fraser Institute.
Tegan Hill, co-author of the study, added that rising debt levels impose “real costs” on Canadians, emphasizing that money used to service debt is unavailable for other priorities.
The Fraser Institute, which has offices in Vancouver, Calgary, Toronto, and Montreal, is an independent policy research organization that does not accept government funding to preserve its independence.