Federal government should have taken own advice about debt accumulation

In 2024/25 the federal government now expects to pay $54.1 billion in debt interest, or $1,331 per Canadian, which is $2.0 billion more than it plans to spend on health care transfers to provinces.

In the foreword of the Trudeau government’s recent budget, Finance Minister Chrystia Freeland declared that, “it would be irresponsible and unfair to pass on more debt to the next generations.” Minister Freeland is absolutely right—if only she had listened to her own advice.

Fairness was the purported theme of this federal budget and nearly every new policy is presented as something that will help make life fairer for Canadians—especially younger generations. But the glaring contradiction is that partly due to all of the new spending on these policies, the Trudeau government is doing the very thing it admits is “unfair” and saddling future generations with hundreds of billions in added debt.

By 2027/28, the Trudeau government plans to add $395.6 billion to the total (gross) amount of debt held federally, which is $180.0 billion more than it planned to add just last spring. Overall, gross debt is projected to increase by nearly 20 per cent over the next four years. Adjusting for population growth and inflation during this period, by the end of 2027/28 every Canadian will be responsible for $2,301 more in gross federal debt than they are currently.

Much of this added debt stems from the introduction of new programs, which have caused federal program spending (total spending minus debt interest) over the next four years to be an expected $77.2 billion higher than was forecasted last spring. And though the Trudeau government will increase capital gains taxes to try and pay for this new spending, much of the new spending will still be financed through borrowing. Indeed, combined deficits from 2024/25 to 2027/28 are $44.7 billion higher than forecasted in last year’s budget, and there is no balanced budget in sight at all.

The problem with accumulating substantial amounts of debt, and why Minister Freeland is right when she asserts that it’s “irresponsible and unfair,” is that a growing government debt burden imposes costs on Canadians now and in the future.

One of the most important consequences of government debt are debt interest payments. These interest payments represent taxpayer dollars that don’t go towards any programs or services for Canadians, and have grown to impose a significant burden on federal finances. Specifically, in 2024/25 the federal government now expects to pay $54.1 billion in debt interest, or $1,331 per Canadian, which is $2.0 billion more than it plans to spend on health care transfers to provinces.

While debt interest costs represent a more immediate impact, debt accumulated today must also ultimately be paid for by future generations, again in the form of higher taxes. In fact, research suggests that this effect may be disproportionate, with one dollar borrowed today needing to be paid back by more than one dollar in future taxes.

One study estimates that Canadians aged 16 can expect to pay the equivalent of $29,663 over their lifetime in additional personal income taxes as a consequence of rising federal debt. Older age groups shoulder a much smaller burden in comparison. A 65-year-old can expect to pay $2,433 over their lifetime in additional personal income taxes due to rising federal debt.

The outsized burden of federal debt borne by younger generations of Canadians is hardly what any reasonable person would consider “fair.”

For all its talk about fairness and helping the next generation of Canadians, the Trudeau government’s incessant spending and substantial debt accumulation will simply result in young Canadians paying disproportionately higher taxes in the future. Does that seem fair to you?

Authors: Grady Munro Jake Fuss

Related Topics:#2024FederalBudget #FederalDebt #FederalDebtInterestPayments #FraserInstitute #GradyMunro #JakeFuss

Up Next

Toronto’s “Sankofa Square” – The terrible folly and historic injustice of erasing the legacy of abolitionist Henry Dundas

Don't Miss

No accounts on $7.9 million dollar ‘Truth’ Fund

Todayville

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

The case for expanding Canada’s energy exports

International / 36 mins ago

Trump admin wants to help Canadian woman rethink euthanasia, Glenn Beck says

Sports / 53 mins ago

Egypt, Iran ‘completely reject’ World Cup ‘Pride Match’ plan

Business

Storm clouds of uncertainty as BC courts deal another blow to industry and investment

Published on December 9, 2025

Todayville

From the Fraser Institute

By Tegan Hill and Jason Clemens

Recent court decision adds to growing uncertainty in B.C.

A recent decision by the B.C. Court of Appeal further clouds private property rights and undermines investment in the province. Specifically, the court determined British Columbia’s mineral claims system did not follow the province’s Declaration on the Rights of Indigenous Peoples Act (DRIPA), which incorporated the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into law.

DRIPA (2019) requires the B.C. provincial government to “take all measures necessary to ensure the laws of British Columbia are consistent with the Declaration,” meaning that all legislation in B.C. must conform to the principles outlined in the UNDRIP, which states that “Indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired.” The court’s ruling that the provincial government is not abiding by its own legislation (DRIPA) is the latest hit for the province in terms of ongoing uncertainty regarding property rights across the province, which will impose massive economic costs on all British Columbians until it’s resolved.

Consider the Cowichan First Nations legal case. The B.C. Supreme Court recently granted Aboriginal title to over 800 acres of land in Richmond valued at $2.5 billion, and where such aboriginal title is determined to exist, the court ruled that it is “prior and senior right” to other property interests. Put simply, the case puts private property at risk in BC.

The Eby government is appealing the case, yet it’s simultaneously negotiating bilateral agreements that similarly give First Nations priority rights over land swaths in B.C.

Consider Haida Gwaii, an archipelago on Canada’s west coast where around 5,000 people live—half of which are non-Haida. In April 2024, the Eby government granted Haida Aboriginal title over the land as part of a bilateral agreement. And while the agreement says private property must be honoured, private property rights are incompatible with communal Aboriginal title and it’s unclear how this conflict will be resolved.

Moreover, the Eby government attempted to pass legislation that effectively gives First Nations veto power over public land use in B.C. in 2024. While the legislation was rescinded after significant public backlash, the Eby’s government’s continued bilateral negotiations and proposed changes to other laws indicate it’s supportive of the general move towards Aboriginal title over significant parts of the province.

UNDRIP was adopted by the United Nations in 2007 and the B.C. Legislature adopted DRIPA in 2019. DRIPA requires that the government must secure “free, prior and informed consent” before approving projects on claimed land. Premier Eby is directly tied to DRIPA since he was the attorney general and actually drafted the interpretation memo.

The recent case centres around mineral exploration. Two First Nations groups—the Gitxaala Nation and the Ehattesaht First Nation—claimed the duty to consult was not adequately met and that granting mineral claims in their land “harms their cultural, spiritual, economic, and governance rights over their traditional territories,” which is inconsistent with DRIPA.

According to a 2024 survey of mining executives, more uncertainty is the last thing B.C. needs. Indeed, 76 per cent of respondents for B.C. said uncertainty around protected land and disputed land claims deters investment compared to only 29 per cent and 44 per cent (respectively) for Saskatchewan.

This series of developments have and will continue to fuel uncertainty in B.C. Who would move to or invest in B.C. when their private property, business, and investment is potentially at risk?

It’s no wonder British Columbians are leaving the province in droves. According to the B.C. Business Council, nearly 70,000 residents left B.C. for other parts of Canada last year. Similarly, business investment (inflation-adjusted) fell by nearly 5 per cent last year, exports and housing starts were down, and living standards in the province (as measured by per-person GDP) contracted in both 2023 and 2024.

B.C.’s recent developments will only worsen uncertainty in the province, deterring investment and leading to stagnant or even declining living standards for British Columbians. The Eby government should do its part to reaffirm private property rights, rather than continue fuelling uncertainty.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Jason Clemens

Executive Vice President, Fraser Institute

Economy

Affordable housing out of reach everywhere in Canada

Published on December 8, 2025

Todayville

From the Fraser Institute

By Steven Globerman, Joel Emes and Austin Thompson

According to our new study, in 2023 (the latest year of comparable data), typical homes on the market were unaffordable for families earning the local median income in every major Canadian city

The dream of homeownership is alive, but not well. Nearly nine in ten young Canadians (aged 18-29) aspire to own a home—but share a similar worry about the current state of housing in Canada.

Of course, those worries are justified. According to our new study, in 2023 (the latest year of comparable data), typical homes on the market were unaffordable for families earning the local median income in every major Canadian city. It’s not just Vancouver and Toronto—housing affordability has eroded nationwide.

Aspiring homeowners face two distinct challenges—saving enough for a downpayment and keeping up with mortgage payments. Both have become harder in recent years.

For example, in 2014, across 36 of Canada’s largest cities, a 20 per cent downpayment for a typical home—detached house, townhouse, condo—cost the equivalent of 14.1 months (on average) of after-tax income for families earning the median income. By 2023, that figure had grown to 22.0 months—a 56 per cent increase. During the same period for those same families, a mortgage payment for a typical home increased (as a share of after-tax incomes) from 29.9 per cent to 56.6 per cent.

No major city has been spared. Between 2014 and 2023, the price of a typical home rose faster than the growth of median after-tax family income in 32 out of 36 of Canada’s largest cities. And in all 36 cities, the monthly mortgage payment on a typical home grew (again, as a share of median after-tax family income), reflecting rising house prices and higher mortgage rates.

While the housing affordability crisis is national in scope, the challenge differs between cities.

In 2023, a median-income-earning family in Fredericton, the most affordable large city for homeownership in Canada, had save the equivalent of 10.6 months of after-tax income ($56,240) for a 20 per cent downpayment on a typical home—and the monthly mortgage payment ($1,445) required 27.2 per cent of that family’s after-tax income. Meanwhile, a median-income-earning family in Vancouver, Canada’s least affordable city, had to spend the equivalent of 43.7 months of after-tax income ($235,520) for a 20 per cent downpayment on a typical home with a monthly mortgage ($6,052) that required 112.3 per cent of its after-tax income—a financial impossibility unless the family could rely on support from family or friends.

The financial barriers to homeownership are clearly greater in Vancouver. But, crucially, neither city is truly “affordable.” In Fredericton and Vancouver, as in every other major Canadian city, buying a typical home with the median income produces a debt burden beyond what’s advisable. Recent house price declines in cities such as Vancouver and Toronto have provided some relief, but homeownership remains far beyond the reach of many families—and a sharp slowdown in homebuilding threatens to limit further gains in affordability.

For families priced out of homeownership, renting doesn’t offer much relief, as rent affordability has also declined in nearly every city. In 2014, rental rates for the median-priced rental unit required 19.8 per cent of median after-tax family income, on average across major cities. By 2023, that figure had risen to 23.5 per cent. And in the least affordable cities for renters, Toronto and Vancouver, a median-priced rental required more than 30 per cent of median after-tax family income. That’s a heavy burden for Canada’s renters who typically earn less than homeowners. It’s also an added financial barrier to homeownership— many Canadian families rent for years before buying their first home, and higher rents make it harder to save for a downpayment.

In light of these realities, Canadians should ask—why have house prices and rental rates outpaced income growth?

Poor public policy has played a key role. Local regulations, lengthy municipal approval processes, and costly taxes and fees all combine to hinder housing development. And the federal government allowed a historic surge in immigration that greatly outpaced new home construction. It’s simple supply and demand—when more people chase a limited (and restricted) supply of homes, prices rise. Meanwhile, after-tax incomes aren’t keeping pace, as government policies that discourage investment and economic growth also discourage wage growth.

Canadians still want to own homes, but a decade of deteriorating affordability has made that a distant prospect for many families. Reversing the trend will require accelerated homebuilding, better-paced immigration and policies that grow wages while limiting tax bills for Canadians—changes governments routinely promise but rarely deliver.