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‘Follow-Up’ Podcast: The Essential Things To Know About Canada’s Historic Debt Level

There are some concerns on the federal budget watchdog's mind.
Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question during a news conference in Ottawa on Nov. 30, 2020.
CP/Adrian Wyld
Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question during a news conference in Ottawa on Nov. 30, 2020.

OTTAWA — The Liberal government revealed their fall economic statement this week, emphasizing prudence, despite being chock full of tens of billions in new spending and potentially more.

It was a pledge to make good on a throne speech promise to take new baby steps toward designing a national child care program, an idea previously recommended at the federal level 50 years ago and never implemented.

But it was Finance Minister Chrystia Freeland’s pitch to keep the spending taps open, to pump three to four per cent of GDP stimulus spending into the economy once the pandemic is over.

Canada has never defaulted on its debt. But at $381.6 billion, the current deficit has grown to be more than 1000 per cent higher than it was projected to be at the start of the year.

The risk in flirting with perpetual structural debt has some financial experts turning their heads.

“It’ll be very tempting to introduce new programs after you’ve had three additional years of significant new government spending,” current Parliamentary Budget Officer Yves Giroux told “Follow-Up” podcast host Althia Raj.

Canada’s first parliamentary budget officer, Kevin Page, said coming out of the pandemic, people are going to be calling for a national child care program, pharmacare progress on transitioning to a low-carbon economy, and maybe basic income.

“Those are each one of those programs can be $10 billion dollars each,” Page said. “You have to raise taxes a lot to pay for those kinds of programs.”

Listen to the full interview with Giroux and Page below:

Get this episode and more “Follow-Up” on iTunes or Google Play.

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