Deficits & Debt

— Jun 21, 2022
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The Accumulated Debt and Economic Performance of Industrialized Countries during COVID finds that Canada had the second-highest increase in gross debt (as a share of the economy) out of 33 countries from 2019 to 2021 while actually underperforming economically compared to most of the same countries.

— Jun 8, 2022
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Do Budget Deficits Matter?

Low Interest Rates and the Cost of Government Debt and Canada’s Budget and Deficit Cuts in the Late 20th Century: An Amazing Success Story are the latest installments in an essay series on government deficits that emphasize the risks of higher interest costs on government debt, and note the similarities between today’s federal fiscal situation and the mid-1990s when interest costs consumed one of every three dollars of government revenue. At that time, the government enacted major reforms—including spending reductions—to help dramatically reduce the federal debt.

— May 12, 2022
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What Changed in Alberta from the Fall 2021 Mid-year Update to Budget 2022

What Changed in Alberta from the Fall 2021 Mid-year Update to Budget 2022 is a new study that finds following a windfall in resource revenue, the recent Alberta budget increased program spending by $4 billion over the next three years. This increase in spending is above and beyond what would be required to keep pace with inflation and population growth.

— Mar 31, 2022
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Learning from Ontario’s Past

Learning from Ontario’s Past: How Ontario Can Avoid Another Post-Recession Debt Binge is a new study that focuses on how the provincial government could balance the budget by 2022/23, and what mistakes made by past governments should be avoided to ensure fiscal stability. Based on recent projections, the provincial government would need to reduce annual spending by $9.1 billion from its 2021/22 level to balance the budget in 2022/23—a 4.8 per cent decrease.

— Mar 1, 2022
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Ottawa’s Pattern of Excessive Spending and Persistent Deficits

Ottawa’s Pattern of Excessive Spending and Persistent Deficits is a new study that finds between 2015/16 and 2019/20, the federal government ran five consecutive deficits, causing the federal debt to rise by $112.2 billion—all prior to the COVID-19 pandemic, weakening federal finances as Canada headed into it.