$487 billion in debt interest charges before feds balance the budget

Author: Franco Terrazzano 2023/08/02

OTTAWA, ON: The Canadian Taxpayers Federation is calling on the federal government to rein in overspending following the release of Parliamentary Budget Officer data showing the government won’t balance the budget until 2035. 

“By the time the government finally balances the budget, taxpayers will have paid $487 billion in debt interest charges, which is currently what the government spends in an entire year,” Franco Terrazzano, CTF Federal Director, said. “Prime Minister Justin Trudeau needs to stop wasting so much money and balance the books, because sending hundreds of billions of dollars to bond fund managers is unacceptable.”

The feds won’t balance the budget until 2035, according to supplementary data released by the PBO in its most recent Fiscal Sustainability Report. But even that projection depends on economic growth every year, an average interest rate of 2.8 per cent and no new spending beyond what’s included in Budget 2023. 

Between now and the time the budget is balanced in 2035, interest charges on the federal debt will have cost taxpayers $487 billion. For context, the government expects to spend a total of $491 billion this year.

During the 2015 election, Trudeau promised Canadians he would balance the budget in 2019. He missed that target by $20 billion even before the pandemic. In the 2022 Fall Economic Statement, Finance Minister Chrystia Freeland said she would balance the budget in 2027. 

“Waiting until 2035 to balance the budget is too long and the feds won’t even hit that target if interest rates rise higher, the economy doesn’t grow every year or politicians can’t find the willpower to say no to new spending,” Terrazzano said. “This government has given taxpayers every reason to believe it will never balance the budget.”

You can find the PBO’s fiscal sustainability data, including the CTF’s balanced budget calculations, here

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