More than the Second World War: Here's the eyewatering debt Canada is racking up
Tristin Hopper 5 hrs ago
Like16 Comments|4
The latest news on COVID-19 developments in Canada
Italy's Draghi says EMA comments on AstraZeneca vaccine encouraging
accused the Liberals of spending on the “shoulders of future generations.”
© Provided by National Post Minister of Finance Chrystia Freeland delivers the 2020 fiscal update in the House of Commons on Parliament Hill in Ottawa on November 30, 2020.
Fast forward six years, and Canada’s
deficit for fiscal year 2021 is projected to top out at an eyewatering $381.6 billion. We’ve all gotten used to massive quantities of borrowed money being thrown around during COVID-19 (particularly when the Americans
keep approving trillion-dollar spending bills ) but Canada is currently burning through borrowed money at a rate that is unprecedented in our history.
We can discuss debt-to-GDP ratio and other such metrics at a later time, but below are a few comparisons to illustrate the utterly gargantuan amount of debt-financed money currently flowing out of federal coffers.
Canada is borrowing $27.80 per citizen, per day
Video player from: YouTube (
Privacy Policy,
Terms)
There are 37.6 million people in Canada as of last count. Divide that by our total 2020 federal deficit and you have $10,151.63 in borrowed money for every single homo sapiens with a pulse living under the Maple Leaf. This means that for each day of 2020, every single one of us was having roughly $27.80 borrowed on our behalf — or a
15-pack of Molson Canadian from The Beer Store . The amount owing goes up considerably when you consider that upwards of 40 per cent of Canadians
do not pay any effective income tax . When the figure is broken down among the taxpayers who will actually be expected to cover it, we’re looking at about $46 per day (
which will buy you a two-four at The Beer Store ). Oh, and the federal debt
just passed $1 trillion for the first time .
Borrowing beer in such daily quantities rarely ends well.
We could have paid for another Second World War
Until the onset of COVID-19, it was generally agreed that the Second World War was the most expensive thing that Canada had ever undertaken. Government expenditures rose 4,000 per cent nearly overnight, and by 1943 Canada had one of the world’s largest navies and a powerful enough army to capture and occupy swaths of Italy, France, Germany and the Netherlands. From 1939 to 1950, the conflict
cost Canada $21.8 billion . When converting that into 2021 dollars, that’s about $386 billion. Granted, modern-day Canada has a much larger population and GDP. Nevertheless, in a single 12-month span, we ran up enough deficit to pay the shipping and handling on every single bullet, shell and bomb we threw at Nazi Germany in the 1940s.
© Ingenium Archives, CN Images of Canada Collection, X-14719 Just some of the shells that Canada lobbed at fascist Europe. At the time this photo was taken, the country was paying and equipping more than 1 million uniformed personnel.
The COVID deficit is more than double every other 21st century deficit combined
After 11 consecutive years of posting budget surpluses, in 2008 Canada’s finances veered back into the red as a result of the Great Recession. Even then, the worst year for spending yielded a deficit of only $56.4 billion. In fact, if you add up all the deficits from 2008 to the first fiscal year of the COVID-19 pandemic,
the total is $147 billion . These years were definitely not Canada’s finest hour in terms of living within our means, but it’s worth noting that 10 years of blow-out-the-budget spending was matched by only five months of spending under COVID.
© Postmedia Prime Minister Stephen Harper in 2009, back when a $50 billion deficit was considered extreme.
Just one year of Canada’s borrowed COVID spending could have bought two Apollo programs
The U.S. program to land humans on the surface of the moon cost about
US$25.4 billion in the early 1970s, which is equivalent to roughly $194 billion in modern Canadian dollars. This means that with only one year’s deficit, Canada could twice cover the entire cost of a pioneering space exploration program. And Apollo wasn’t just Neil Armstrong and Buzz Aldrin getting a trip to the moon in 1969: That money covers five manned expeditions to the lunar surface, one
failed expedition that turned into a Ron Howard film and even
that weird 1975 mission where an Apollo capsule mated with a Russian one in orbit .
© NASA Like this, except the astronaut would be named Gord.
It’s more than five years’ worth of global gold production
From Klondike streams to South African pits, there are thousands of gold mines around the world employing millions of people in the search for everyone’s favourite shiny metal. And if Canada could somehow seize every single gold-producing facility on the planet earth, the resulting mountain of treasure would only cover one fifth of our most recent COVID deficit. World gold production was
3,531 tonnes in 2019, which is about as heavy as a respectable mid-sized cargo ship. At
current gold prices (which have been driven up substantially by the pandemic), all that gold is still going to cover only about CAD $76.2 billion.
© Dieter Nagl/AFP/Getty Images This 100 kg gold coin would fund about 15 minutes’ worth of Canadian deficit accumulation.
The deficit could have paid for enough Confederation Bridges to join Canada and Ireland
Completed in 1997, the 12.9 kilometre bridge to Prince Edward Island was constructed for the modern equivalent of about $1.54 billion. This means that at Canada’s rate of 2020 deficit accumulation, Ottawa could have financed a Confederation Bridge roughly every 36 hours. By year’s end that would be equal to 248 bridges spanning a total of 3,200 kilometres. Obviously the Atlantic Ocean would demand a much more complex bridge design, but 3,200 km happens to be the near-precise distance between St. John’s, Newfoundland and Dublin, Ireland.
© Google Maps Give or take a few bridges.
Remember when we ran up that massive surplus in 2001? We’re borrowing the equivalent every 28 days
In 2001, years of fiscal belt-tightening under Prime Minister Jean Chretien yielded one of Canada’s proudest moments of fiscal responsibility: An 11-figure surplus of $19.891 billion. It was a magnificent comeback after a 1990s fiscal crunch so dire that Canadian debt could only be loaned out at Third World interest rates. In 2021 dollars, however, the 2001 surplus is only about $28.5 billion or, about 28 days’ worth of federal deficit under the current budget. Canada’s economy is much larger than the 1990s and thus able to handle higher quantities of sovereign debt, but this might be a good place to mention that our debt-to-GDP-ratio is
fast approaching the 66 per cent rate that almost ruined Canada 30 years ago.
Paul Martin weeps.
• Email: [email protected] | Twitter:
TristinHopper
:
