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The Cost of Government Debt in Canada, 2017

Currently, the Canada federal government and seven provinces are projecting deficits for the 2016/17 fiscal year. Debt levels for all governments are projected to grow in 2016/17 and rising debt levels in some provinces have attracted negative attention from credit rating agencies. With governments set to release their budgets in coming months, deficits and debt warrant particularly close attention. The ongoing trend by many Canadian governments of deficit spending and growing government debt carries short- and long-term consequences for the country and its citizens. This research bulletin examines the growth of government debt in Canada since the 2008/09 recession and the immediate consequences of that debt—specifically, government spending on interest payments to service previously accumulated debt.