Comment 63063

By A Smith (anonymous) | Posted May 04, 2011 at 15:50:06

From 1982-2000, interest payments for all levels of government never fell below 7% of GDP. During that period, real GDP per capita averaged 2.016% per year. From 2000-2008, interest payments fell from 7.11% of GDP to 3.89% and due to very low borrowing costs, are likely not much higher today. However, from 2000-08 Canada's real GDP per capita only averaged 1.27% a year.

In other words, our economy seemed to perform better, or at least no worse, when debt charges were much higher than today.

Let's assume for a minute the federal government decided it wanted to build out Canada's infrastructure. As of Mar 2010, Canada's federal net debt stood at $582.5B. However, the debt charges associated with that number were only $29.4B, or 1.875% of GDP. If it took that debt to $1 Trillion, it would mean new infrastructure spending of $12,488 per person in Canada. Hamilton's share would amount to $6.565 Billion.

According to this...

http://lrt.daxack.ca/LRTvsHRT/CostCompare.html

that would mean Hamilton could afford 21.9km of subway. The distance from Eastgate to McMaster is 14.3km. That means it would still have 2.275B to use for operating costs associated with the subway.

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