Wednesday, February 2, 2011

Surprise! Canada’s Debt Is Worse Than Thought

« Canadian Prime Minister Stephen Harper leads a country facing an economic crisis as severe as the United States.
(Dominique Faget/AFP/Getty Images)

Canada’s Gross National Debt for fiscal year 2009 was a staggering $1.2 trillion. You read that right–it’s well over 1 trillion dollars! The often quoted $521 billion dollar debt doesn’t include provincial debt.
Since Canada’s current population is estimated to be 34 million (about the population of California), that means every man, woman and child in the country owes over $35,000 each.
The International Monetary Fund’s estimate for the end of fiscal year 2010 doesn’t brighten the fiscal horizon either. Canada is expected to owe $1.3 trillion when statistics are released.
And this is only federal and provincial debt. It does not include that of municipalities, corporations or individuals. It also does not include pension obligations.
With Canada’s population roughly one tenth that of the United States, this means the nation’s gross federal debt is analogous to that of the U.S., which in 2010 surpassed $14 trillion. However, there is one big difference. Canada is still in the midst of a massive housing bubble that has not yet popped. Also, Canada does not have a massive military that can be slashed to help balance its budget (as America is beginning to do).