For the First Time, The Government of Canada Now Owes over $1 Trillion Dollars in Long-Term Bonds
First, a quick recap:
A bond is a debt instrument the government sells to raise money — by definition a “bond” is anything that exceeds 1 year until maturity.
Basically, a bond is longer-term debt, whereas a treasury bill is anything which has a maturity under 1 year (short-term debt).
Data released by the Bank of Canada Reveals that, for the time ever, the Government of Canada now owes over $1 trillion dollars in bonds.
The Government Owes Another Quarter Trillion in Short-Term Bills
The Government of Canada is not neglecting its short-term debt numbers either.
They now owe $276 billion dollars in short-term bills; and because these short-term bills have maturities of less than a year, we know that these are all sitting at 4%+ interest rates.
The Interest Cost of All of This Debt? It’s Staggering
We’ve previously written about the costs of this debt:
And here:
In a nutshell though, the Government of Canada paid $3.6 billion dollars on interest expenses in the month of February 2024, this is $43.2B annualized.
In 2023, all Governments in Canada officially paid $93.8 billion in interest, with most of the contribution coming from the Federal government, whose interest expenses increased by 39.3% in a single year.
Gross Debt at 106.4% of GDP in 2023
Once we account for conversion to US dollars we find that Canada’s Federal Government debt to GDP now sits at 45%.
Total government gross debt (which includes Provincial debt) now sits at 106.4% of GDP, in the middle of the G7 pack.
Note: The Federal Government often expresses their debt using “net debt”, which is a misleading metric as it counts CPP assets at being available to reduce debt, but conveniently doesn’t include CPP liabilities.
