Canada's national debt will hit record high Friday

13:58, March 18, 2011      

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The national debt of Canada will reach a new record high Friday, wiping out the debt repayments made before the recession, an anti-debt watchdog group said Thursday.

The debt of Canada's federal government will reach 562.9 billion Canadian dollars early Friday morning, according to the Canadian Taxpayers Federation, a citizens' group that opposes deficit spending.

The group says it bases its calculations on figures provided by the Canadian government.

The debt levels wipe out 11 years of payments made by the national government, which ran surpluses prior to the recession. The last time Canada's debt reached 563 billion dollars was in 1997.

The Canadian Taxpayers Federation says the Conservative party government, which claims to be careful managers of federal spending, has run up 105 billion Canadian dollars in new debt since the banking and stock market crisis of 2008.

The Canadian government has used stimulus spending, most of it used for infrastructure and other public works, to try to cushion the effects of the recession.

Derek Fildebrandt, the taxpayer group's research director, said all politicians in Canada's parliament are to blame for the increased debt, since no party advocates spending cuts.

"Every party on Parliament Hill is responsible for the debt clock spinning out of control," Fildebrandt said.

Thursday, his group brought a "debt clock" to Canada's Parliament. The LED lights in the trailer showed the debt level as is spun past 562.9 billion dollars. "Every national party leader promised balanced budgets during the last election. Yet when the opposition parties demanded deficit budgets, the government gleefully obliged."

The Conservative government of Prime Minister Stephen Harper will bring down a national budget next Tuesday. It is expected to show federal spending deficits lasting until 2015. This fiscal year, the deficit was about 40 billion Canadian dollars.

The national debt now stands at about 34 percent of GDP. Provincial and municipal governments in Canada are also heavily indebted.

The level of debt will surpass 1997 levels, but on a nominal basis. Measured on an adjusted basis, the debt today is roughly 34 percent of GDP, compared to the 67-68 percent when federal debt last reached 563 billion Canadian dollars.

"The last time the federal government ran a temporary deficit it lasted for 27 years," he said. "How long are we going to continue to do this? The Finance Minister has an opportunity [in the budget] to turn the corner."

Scott Hennig, national communications manager with the Canadian Taxpayers Federation, said he and Fildebrandt left Victoria, British Columbia with the debt clock on Feb. 22 and planned to arrive in Halifax, Nova Scotia about March 26 -- a distance of 8, 000 kilometers.

They have stopped in towns and cities along the route and have set up the clock in public areas. Henning said people are shocked and saddened by the size of the debt and the speed of its growth. (1 U.S. dollar = 0.988601426 Canadian dollars)

Source: Xinhua

 
 
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