Canadians on hook for thousands in government debt costs: Study

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OTTAWA — Government debt will cost Ontarians $2,242 this year, according to a new Fraser Institute report.

This year’s edition of the institute’s Federal and Provincial Debt Interest Costs for Canadians report shows combined provincial and federal debt will cost Canadians between $1,937 and $3,432 depending on the province lived in.

“Governments across Canada continue to rack up large debts, which impose real costs on Canadians,” said study co-author Tegan Hill, who is also director of the institute’s Alberta policy studies.

“Interest payments across the country are substantial, and money that goes to creditors is money that is not available for other important priorities.”

Albertans will pay the lowest in 2025, at $1,937, while those from Newfoundland and Labrador will be on the hook for $3,432.

The study also points out that Ontario, Quebec and Alberta pay as much in combined debt interest costs as the provinces spent on kindergarten to Grade 12 education in the 2024-25 school year — while the $11.8-billion interest costs for British Columbia is more than what the province plans to spend on social services.

“Interest must be paid on government debt, and the more money governments spend on interest payments the less money is available for the programs and services that matter to Canadians,” said Jake Fuss, study co-author and the institute’s fiscal studies director.

The study says the federal government is expected to spend $92.5 billion on debt interest in 2024-25 and $53.8 billion to service that debt — more than the $52.1 billion spent on the Canada Health Transfer, and $35.1 billion set aside for childcare benefits.

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