Question

At a party recently, you overheard a person say the Canadian Federal Debt as of March 2019 was approximately $768 Billion but that we should not be worried because our debt-to-GDP ratio is the best of all G7 countries.

Questions:

• Do you agree with this person? Explain.
• How has the Covid-19 Pandemic changed Canada's debt-to-GDP Ratio?

Answer 1

Answer - Yes , I agree with this person . In year 2019 , the Federal debt of Canada was $ 768 billion . While the GDP was $ 2.2 trillion. What this means is that the income of the country is greater than the debt owed . Also , among all the G7 countries , Canada has the lowest Debt to GDP ratio of just 34 % and tops the list.

The pandemic situation all across the nation has had a drastic effect upon the budgetary conditions. Canada is likely to have $ 343 billion deficit in the upcoming fiscal year because of all the government spending being done to mitigate the effects of corona virus in the economy.

Due to these , the Debt to GDP ratio of Canada has risen to around 49 % , from 34 % in the last fiscal year