John Robson digs deeper into Canada’s debt situation than most others have in the media. As he points out, things are not as good as they may seem.
“How bad is Canada’s debt? By some measures we’re laughing here.
Our federal debt is about 35% of GDP while the U.S. passed 100% on Tuesday, and Ottawa’s deficits are only 2% of GDP rather than Washington or London’s staggering 10%. But let me try to wipe the smile off your face.
For starters, a more realistic on-book number for Canadian public debt is over 80% of GDP. That’s what the IMF gets by including provincial as well as federal debt (for instance, Quebec’s $238 billion) and such “hard” unfunded liabilities as public sector pension funds.
An even bigger reason for worry is soft unfunded liabilities for things such as the Canada Pension Plan and the Canada Health Act. In 2006 the Chief Actuary of Canada formally estimated the unfunded liabilities of the CPP at $620 billion.”