Canada’s Borrowing 2.2x Deficit, Payments To Hit 1 in 7 Dollars of Revenue: PBO

Is it a bird? A plane? No, it’s… the size of Canada’s debt servicing costs. The Parliamentary Budget Officer’s (PBO) latest Economic and Fiscal Outlook projects Ottawa will accumulate $333 billion in deficit spending over 5 years. However, the Government of Canada (GoC) will need to borrow nearly three-quarters of a trillion dollars. Debt servicing is now the fastest-growing federal expense, projected to consume almost 1 in 7 dollars of revenue by 2030. Federal Borrowing To Grow More Than 2x As Much As Deficits Ottawa will accumulate $333.3 billion in cumulative deficits from 2026-27 through 2030-31. At the same time, the GoC will borrow an additional $732.9 billion, according to the PBO’s projections. That’s roughly 2.2 times as much borrowing than the projected deficit—or a deficit less than half the size of new borrowing. It depends on whether you’re a half-insolvent or half-solvent kind of person. One of the reasons behind the gap is accounting methodology. Loans are both a liability and an asset; just think of it like a mortgage. One borrower’s liability of $100k is an asset of $100k to the lender. In this case, the gap is driven by Crown corporations and acquiring other asset...