VANCOUVER, British Columbia, Sept. 17, 2024 (GLOBE NEWSWIRE) -- If the median Canadian family spent and borrowed like the federal government, they would already be $427,759 in debt and continuing to borrow, finds a new study published today by the Fraser Institute.
“If the median family in Canada spent and borrowed like the federal government, they would be in serious financial trouble,” said Grady Munro, a Fraser Institute policy analyst and co-author of Understanding the Scale of Canada’s Federal Deficit.
The $39.8 billion deficit expected by Ottawa in 2024/25 represents the 17th consecutive annual federal deficit, with continued deficits expected into the foreseeable future, eventually resulting in higher taxes for Canadians.
Continuous annual borrowing by Ottawa to finance increased spending has driven federal total debt from 53.0 per cent of the economy ($1.1 trillion) in 2014/15 up to an expected 69.8 per cent ($2.1 trillion) in 2024/25.
To put this into perspective, the study’s analysis offers an example of what a median family’s household finances would look like if they were to spend and borrow like the federal government in 2024.
The study found that the median Canadian family in 2024 would spend $109,982 while only earning $101,821, meaning that it would borrow $8,161 just to pay for its normal spending. This $8,000-plus in additional debt is on top of the $427,759 in existing debt the family would already hold based on previous borrowing.
Illustrative of the burden of debt, $11,066 of the family’s income, representing almost 11 per cent, would be spent on just the interest costs of existing debt.
“Unlike most households, where debt is often offset by assets such as a home or investments, the federal government has little in the way of assets to offset its enormous debt,” said Jake Fuss, director of fiscal policy at the Fraser Institute and co-author.
“And it’s important to note that this government debt burden on Canadian families does not include the burden of provincial and municipal government debt, which depending on one’s location, can be significant.”
MEDIA CONTACT:
Jake Fuss, Director, Fiscal Policy
Fraser Institute
Grady Munro, Policy Analyst
Fraser Institute
To arrange media interviews or for more information, please contact:
Drue MacPherson, Fraser Institute
(604) 688-0221 ext. 721
drue.macpherson@fraserinstitute.org
Follow the Fraser Institute on Twitter | Become a fan on Facebook
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Halifax, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org
