Statistics -> Canada's Interest-Bearing Debt by Party
Where Did Canada's Interest-Bearing Debt Come From?
From March 31 to November 30, 2016, Canada's interest-bearing debt has increased by $31.95 billion, almost as much as it increased in the 10 years ending March 31, 2016. The budgetary deficit for this period was $12.7 billion. See the November 30, 2016 Fiscal Monitor, Table 1 for the budgetary deficit, and Table 6 for the total interest-bearing debt. Unfortunately, it appears that Justin Trudeau's Liberal government is taking us into a spiral of debt, as was done by Pierre Trudeau in the 1970's and 1980's. We are now paying $2 billion per month in interest, at historically low interest rates!
The total interest paid on interest-bearing debt of the federal government, from April 1, 1963 to March 31, 2016 was $1.267 trillion.
Each political party usually blames another party for increasing the national debt, but it's difficult to see where the debt really came from.
We've done some analysis using the Department of Finance Fiscal Reference Tables, and information on Prime Ministers from the Parliament of Canada website, to try to determine the increase in the federal interest-bearing debt by party. Since 1962, the only years in which there have been reductions in the outstanding interest-bearing debt are 2002 to 2009.
The first date for which we have the amount of interest-bearing debt is March 31, 1962. We used the March 31, 1963 interest-bearing debt as a starting point, as this was just prior to the swearing-in of Lester Pearson, Liberal Party of Canada, as Prime Minister.
We wanted to see what would have happened if, after March 31, 1963, the interest-bearing debt was not increased or decreased, except for the interest on the debt. Believe it or not, most of the debt at March 31, 2016 can be attributed to debt incurred prior to March 31, 1963!
The Liberal party was in power from April 22, 1963 to September 17, 1984, except for the short tenure of the Progressive Conservative party from June 4, 1979 to March 3, 1980, which we ignored, as no budget was passed.
All amounts in the following table are in millions of dollars.
* The Total is not the actual debt, except for March 31, 2016.
The March 31, 2016 amount has been increased by $4.88 billion. The previous amount in the above table was from the Fiscal Monitor because the March 31, 2016 Fiscal Reference Tables were not available at that time.
The interest rate used in the calculations is the average rate paid on public debt each year. This was determined by dividing the interest paid on public debt for each fiscal year by the outstanding interest-bearing debt at the beginning of the fiscal year.
We then did the same process for each government, taking the interest-bearing debt at the end of the party's time in power, and adding interest to March 31, 2016. If the government was sworn in during the months of September to December, we used the debt from March of the next calendar year as the starting point for that government. For governments sworn in during February March or April we used the debt from March 31 of the calendar year they were sworn in as the starting point. The fiscal year of the government is April 1 to March 31.
We calculated the increase attributed to each party by taking their ending debt, increased by interest to March 31, 2016, and subtracting the previous party's ending debt increased by interest to March 31, 2016.
Tax Tip: This is a good example of what happens when debt is allowed to compound! Pay down debt!
Sources of Information:
Fiscal Monitor March 2016 - Public Debt Charges from Table 1, total interest-bearing debt from Table 6
Fiscal Reference Tables 2015, Table 7 Expenses (Public Debt Charges) - interest expense starting with 1966-67 fiscal year
Fiscal Reference Tables 2010, Table 7 Expenses (Public Debt Charges) - interest expense starting with 1961-62 fiscal year
Fiscal Reference Tables 2015, Table 14 Interest-Bearing Debt - amounts outstanding at March 31st each year starting with 1966-67 fiscal year
Fiscal Reference Tables 2010, Table 14 Interest-Bearing Debt - amounts outstanding at March 31st each year starting with 1961-62 fiscal year
Parliament of Canada - Terms of Prime Ministers, click on the P.M. name to determine political party
Revised: July 10, 2018
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