Federal government’s total ‘market debt’ now tops $1 trillion, documents show
Source: CBC News
Author: Murray Brewster
The federal government’s market debt — the debt on which Ottawa pays interest — has topped $1 trillion for the first time, Department of Finance documents show.
It is a milestone, says former parliamentary budget officer Kevin Page.
The threshold, he said, highlights the urgent need for the Liberal government to have a strategy to both balance the federal books and manage the debt in an era of rising interest rates.
“It’s important for Parliament to wrap its head around borrowing,” Page told CBC News.
Market debt is different from the federal debt and deficit figures, which are regularly presented to and debated by Canadians and reflect the federal government’s estimated total liabilities, or cash needs, and what must be borrowed from the markets.
Think of market debt as something like a mortgage — or the balance on a line of credit.
“It’s debt that generates interest,” Page said. “And Canadians will be surprised at how fast interest on the public debt is going to grow over the next five years.”
The market debt figure for 2017-18 does not reflect the cash, land or other assets the federal government has on hand.