Comment 75154

By Drachmas to Donuts (anonymous) | Posted March 11, 2012 at 06:22:53 in reply to Comment 75146

How big is Canada’s debt?

...Canada’s accumulated debt, or the sum of all its budget deficits, translates into about 30% of the total GDP. That makes the country a shining star among struggling G7 economies and represents a drastic decline from the mid-1990s when the federal debt-to-GDP ratio hit nearly 70%. In real dollars Canada’s debt did set a record. But adjusted for inflation, today’s federal debt pales in comparison with the records of the mid-1990s. For instance, the debt in 1996 stood at nearly $769-billion when adjusted for inflation, 25% higher than the present-day debt.

So that’s all there is to it, right?

Not exactly. Other analysts take a different approach to calculating Canada’s debt, putting the debt-to-GDP ratio anywhere from 30% to as high as 80%. For example, by looking at Canada’s gross debt, which includes the debts of provincial governments, but excludes some assets like the Canada/Quebec Pension Plan accounts, Canada’s debt-to-GDP ratio increases to closer to 65%. That increase owes much to Ontario’s skyrocketing debt, projected to be nearly $250-billion by next year (2012), and Quebec’s dismal 50% debt-to-GDP ratio. The International Monetary Fund debt calculations, in contrast, also include unfunded liabilities such as public sector pension funds. Those calculations put Canada’s debt closer to $900-billion and the country’s debt-to-GDP ratio as high as 80%. The Organization for Economic Co-operation and Development excludes employee pension plan future liabilities, but includes current public sector pension plan assets in its calculations, making Canada’s combined federal and provincial debt closer to 30%.

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