Federal Debt Charges Cost Each Canadian $1,400 a Year, Taxpayer Group Says

Canadians are each effectively paying $1,400 this year to cover federal debt interest charges, a taxpayer advocacy group says, as it urges Ottawa to rein in spending.

The estimate, which refers specifically to public debt servicing costs rather than an actual bill Canadians pay directly, is based on a recent report from the Office of the Parliamentary Budget Officer.

The report projects that interest costs will keep rising, increasing as a share of federal revenues over the next several years.

According to the report, interest burden on public debt is expected to remain broadly unchanged from Budget 2025 levels, but is still on an upward trajectory, with projected public debt charges rising from 10.6 percent to 13.2 percent of federal revenues between 2025–26 and 2030–31.

On a per-capita basis, debt servicing costs are forecast to increase from $1,409 in 2026–27 to $1,901 by 2030–31, reflecting slow population growth alongside a growing overall debt load.

The Canadian Taxpayers Federation (CTF) says the spending trend reduces fiscal room for programs like health care, infrastructure, and tax cuts, and calls for tighter federal spending control.

“That’s $1,400 that the government is taking from each Canadian that can’t be used to hire nurses, fix potholes or lower taxes because the government is wasting that money paying interest on the debt,” CTF Federal Director Franco Terrazzano said.

The CTF also compared information in the Spring Economic Update to show that the debt interest burden outweighed health spending and tax revenue. While debt interest charges will cost taxpayers $58.7 billion this year, Ottawa will only send $57.4 billion to the provinces in health transfers, and collect $53.4 billion through the GST, it said.

The PBO report shows federal debt continued to rise despite an improved operating balance compared with earlier projections, with borrowing still driven in part by measures including the temporary suspension of the federal fuel excise tax on gasoline, diesel, and aviation fuel.

The report projects that Canada’s debt-to-GDP ratio will decline to 25.1 percent by 2060–61, suggesting fiscal sustainability under International Monetary Fund (IMF) standards and indicating some fiscal room for either higher spending or lower revenues while keeping debt stable. However, it cautions that the interest burden is still rising, driven by slow population growth and an expanding debt stock.

It cites an IMF recommendation that Canada reinstate the debt-to-GDP ratio as its primary fiscal anchor to strengthen discipline and credibility, while noting that long-term projections do not fully account for all planned expenditures, including defence spending.