Canada Flag National Debt

Canada Debt Clock



C$ 1,199,215,202,097



Source: Canadian Government Data,and it excludes Provincial Debt. Different figs to other sites? Please read the Debt Explained page.

Interest Payments Per Year

$22,276,350,000

Interest Payments Per Second

$706

National Debt Per Citizen

$24,993

Debt as % of GDP

60.68%

GDP Of Canada

$1,494,537,000,000

Canada Population

36,285,770

The National Debt Of Canada

Canada’s national debt is counted as the debts of the government of the Kingdom of Canada’s central federal government, based in Ottawa. The national debt figure includes all public debt, encompassing the accounts of Canada’s provinces and territories as well as the central government. The account of debts is limited to loans and financial instruments undertaken by the central and provincial governments. According to the IMF, by the end of 2017, Canada’s national debt was just shy of 90% of GDP.

Canadian parliament building
Source: Wikipedia

The table below shows how Canada’s debt has evolved and the amount of interest paid each year.

C$ bnNet DebtInterest on DebtAccumulated Deficit
2009–10193,5899,119130,957
2010–11214,51110,005144,573
2011–12236,23010,587158,410
2012–13252,82310,878167,132
2013–14267,96811,155176,634
2014–15285,40311,221187,511
2015–16295,37211,589192,029
2016–17301,64811,709193,510
2017–18308,20311,965192,449
2018–19325,04112,543199,153

This constant rise in the Canadian national debt is a worrying trend. Ordinarily, governments should aim to reign in debt during boom years when tax receipts are high, but Canada has continued to borrow through the good times, leaving it little room for maneuver if the economy turns sour.

What is included in Canada’s national debt?

Not all obligations are included in the national debt. The table below clarifies what is and isn’t included.

Canadian Government ObligationGovernment DepartmentIncluded in National Debt?
Government-issued bondsDepartment of FinanceYes
Short-term debt instrumentsDepartment of FinanceYes
Provincial government debtProvincial financing authoritiesYes
Civil Service pension obligationsAllNo
National Pension obligationsCanada Pension Plan Investment BoardNo
National bank guarantee schemeDepartment of FinanceNo
Accounts Payable (unpaid bills)AllNo

Canadian Provincial Debt

The provinces of Canada have a great deal of autonomy. They are responsible for running Health, Education, and Social Security systems, all of which cost a great deal of money and incur debts. The figures below refer to “net debt.” The IMF calculations on Canada’s debt to GDP ratio work on “gross debt.”

GovernmentPercent of Debt to GDP for the Fiscal Year 2016/2017Percent Increase between 2007-2017
Alberta3.3124.7
British Columbia15.125.2
Manitoba34.160.7
New Brunswick42.469.8
Newfoundland & Labrador49.541.3
Nova Scotia36.93.4
Ontario40.254.5
Prince Edward Island34.719.1
Quebec48.118.4
Saskatchewan11.52.9
Federal36.110.1
Combined Federal & Provincial67.524.5

The rate of increase in provincial debt has not been uniform. For example, Alberta’s debt has increased by almost 125% whereas Saskatchewan’s debt has increased by ust under 3%.

Each province of Canada raises its own debt through debt instruments. For example, the Province of Ontario owes C$348.8 billion outstanding and some of that debt is denominated in foreign currencies. These are:

  • U.S. dollars
  • Euros
  • Swiss francs
  • Australian dollars
  • Pound Sterling
  • Japanese yen

The currencies in which Ontario’s debt instruments are issued are shown below in order of magnitude, with the equivalent sum in Canadian dollars alongside.

  1. Canadian Dollars — C$278.3 billion
  2. U.S. Dollars — C$40.4 billion
  3. Euros — C$13.6 billion
  4. Swiss Francs — C$2.2 billion
  5. Australian Dollars — C$1.5 billion
  6. Pound Sterling — C$0.9 billion
  7. Japanese Yen — C$0.5 billion

These figures are for just one province of Canada. This shows that a single province in the country manages a debt that is as large as that of many small industrialized countries. So, the composition of Canada’s national debt is complicated and involves many different agencies that are authorized to issue bonds. In the case of Ontario, the debt of the province is managed by the Ontario Financing Authority.

Non-Public Debt

Although it is not counted as part of the national debt, the federal government and each province maintains a count of non-public debt. The main source of this debt is the national pension scheme, which is called the Canada Pension Plan Investment Board (CPPIB).

Government obligations to future pension payments are not recorded.

Who manages Canada’s national debt?

The federal debt is the responsibility of the central government’s Department of Finance. This ministry issues three types of debt-raising instruments:

  • Treasury bills for short-term finance
  • Government bonds for long-term finance
  • Savings bonds for the retail market

Of these three sources, both Treasury bills and bonds raise equal amounts of money. This is unusual because most governments tend to raise much more in bonds than in Treasury bills. Short-term financing is generally more expensive than long-term debt and usually only used to smooth out the irregular remittances of tax and excise incomes. This source of debt is more likely to be high in countries such as Argentina or Turkey where investors have lost confidence in the government to repay debts over the longer term. However, Canada has an excellent credit rating, so it shouldn’t need to resort to short-term instruments in such large measure.

A Treasury bill doesn’t pay any interest, but it is sold at a discount and redeemed at full face value. As this is a short-term financing device, Treasury bills do not have a maturity period of longer than one year minus one day. The one year period is the minimum maturity for a debt instrument to be defined as “long-term.”

Savings bonds are a useful mechanism for the government to diversify into the retail market. However, these bonds only provide a very small source of funds for the Canadian government.

The chart below shows how Canada raises its financing by instrument type. As you can see from these three sample years, the issuance of Treasury bills is consistently high.

Canada Source of debt
Source: Bank of Canada

The government of Canada offers three types of bonds:

  1. Benchmark bonds
  2. Real Return Bonds
  3. Canadian Savings Bonds

The Canadian Savings Bond is officially considered a debenture rather than a bond. These were issued by the Bank of Canada, but were discontinued in 2017.

The benchmark bond is the classic government bond with maturity terms of between 2 years and 50 years. These bonds pay a fixed rate of interest each year and are redeemed at full face value on maturity.

The Real Return Bond is Canada’s inflation-linked bond. The face value of these bonds increases each year in line with inflation. The bond pays the same interest rate every year throughout its life. However, as that percentage is applied to a larger capital amount each year, the interest paid on these bonds increases with inflation as well.

As with the provinces, some government bonds are issued in foreign currencies. The table below shows the planned and actual debt raising actions of the Department of Finance for 2017. All figures are shown in billions of Canadian Dollars.

Sources of borrowingsPlannedActualDifference
  Payable in Canadian currency
    Treasury bills1341373
    Bonds1331330
    Retail debt121
  Total payable in Canadian currency2682724
  Payable in foreign currencies104-6
Total cash raised through borrowing activities278276-2

Canada’s Department of Finance got its projections pretty close to what the government actually needed to borrow in the end. This is another good sign that Canadian debt is worth investing in because a government that has statisticians that can actually predict borrowing requirements is less likely to be caught out by events and more likely to manage its debt responsibly.

What facts should you know about Canada’s national debt?

  • You could wrap $1 bills around the Earth 3,530 times with the debt amount.

  • If you lay $1 bills on top of each other they would make a pile 99,042 km, or 61,542 miles high.

  • That's equivalent to 0.26 trips to the Moon.
Stephen Cooper
Stephen Cooper
Stephen Cooper has been writing for the Web since 2010. His specialist topics are economics, world events, business issues, and IT.