Canada’s Debt Could Become ‘Unmanageable’ if High Spending, Low Productivity Continue, Economists Warn

Labour Minister Seamus O’Regan, Minister of Small Business Rechie Valdez, and Minister of Crown-Indigenous Relations Gary Anandasangaree speak at a press conference as part of Budget 2024 implementation on Parliament Hill in Ottawa on May 2, 2024. The Canadian Press/Sean Kilpatrick

With the Canadian government’s high debt-to-GDP ratios, such as a ratio of debt to nominal GDP sitting at 68 percent in March 2023, economists warn that government debt could become unsustainably high if Ottawa fails to reduce spending, increase productivity, and re-establish business confidence.

“We’re not growing our income per capita, which means that we’re not going to get the tax revenues that we need, plus we’re getting a lot of people retiring. So the situation could end up becoming quite unmanageable if we keep our pace that we’re going,” said Jack Mintz, president’s fellow at the University of Calgary’s School of Public Policy.