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OTTAWA — With Canada’s House of Commons soon set to break for summer, and the Alberta legislature already adjourned, a new report is warning the country’s combined federal and provincial debt burden has nearly doubled since before the 2008 financial crisis.
The Fraser Institute estimates combined government debt across Canada will reach roughly $2.44 trillion in the 2025-26 fiscal year, up from $1.24 trillion in 2007-08.
The report says the country’s combined debt load now represents a projected 75.4 per cent of Canada’s gross domestic product, compared with 53.2 per cent before the global financial crisis.
“Government debt — federally and in most provinces — has grown substantially over the past 18 years, since just before the 2008 financial crisis, creating serious fiscal challenges for Ottawa and provincial governments in the years ahead,” Jake Fuss, director of fiscal studies at the Fraser Institute, said in a statement.
The study measures net debt, which accounts for total federal and provincial debt minus financial assets held by governments.
The report says Manitoba is expected to carry the highest combined federal-provincial debt burden relative to the size of its economy in 2025-26 at 91.3 per cent of GDP.
Alberta, meanwhile, recorded the largest increase in provincial debt relative to its economy over the same period.
According to the report, Alberta’s provincial debt shifted from negative 13.4 per cent of GDP in 2007-08 to a projected positive 8.1 per cent in 2025-26, representing an increase of 21.5 percentage points.
Despite the increase, Alberta is still projected to maintain the lowest provincial debt burden relative to GDP among Canadian provinces.
The report also breaks down debt levels on a per-person basis.
It estimates Alberta residents carry the lowest combined debt burden in the country at about $42,000 per person when provincial debt and Alberta’s share of federal debt are combined.
Newfoundland and Labrador recorded the highest per-person burden at more than $71,000, while Ontario ranked second highest.
The Fraser Institute argues rising debt levels could create long-term fiscal pressures for governments and taxpayers.
“It’s important for Canadians to understand the magnitude of the country’s federal and provincial government debt because deficits and debt today mean higher taxes in the future,” Fuss said.
Governments across Canada significantly expanded spending and borrowing following the 2008 financial crisis and again during the COVID-19 pandemic, contributing to rising debt levels nationally.
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