The federal government's debt interest payments have more than doubled in five years and are now its fastest-growing expense, according to a new Parliamentary Budget Officer (PBO) report that also projects Prime Minister Mark Carney's government will spend $13.5 billion more than budgeted this year.The PBO's latest Economic and Fiscal Outlook, released Tuesday, projects Ottawa will pay $59.3 billion in interest on the national debt this fiscal year, compared with $24.5 billion in 2021-22.That amounts to more than $1 billion every week in interest payments alone, or approximately $1,419 for every Canadian.The Canadian Taxpayers Federation (CTF) says the figures demonstrate the growing financial burden of federal borrowing and is calling on Carney to reduce government spending.“The fastest-growing cost in the government’s budget is the credit card bill and that should be setting off alarm bells in Ottawa,” said CTF Federal Director Franco Terrazzano.“Carney is spending more, borrowing more and taxpayers are paying more than $1 billion every week just to cover interest on the debt.”The PBO identified debt interest charges as the federal government's fastest-growing expense, warning that borrowing costs continue to consume an increasing share of federal finances.The report projects Ottawa will borrow another $63.3 billion this fiscal year, with no balanced budget forecast in the government's fiscal plan.It also raises concerns about the effectiveness of the Carney government's two fiscal anchors, which are intended to restrain federal spending and borrowing.Those commitments include balancing the federal operating budget and reducing the deficit as a share of Canada's gross domestic product.“The two fiscal anchors have imposed limited fiscal discipline on government spending and borrowing,” the PBO concluded..The report also forecasts federal spending will exceed the amount outlined in Carney's 2025 budget.Budget 2025 projected total spending of $588.5 billion this fiscal year, but the PBO now estimates expenditures will reach $602 billion.That represents an additional $13.5 billion in projected spending beyond the government's original budget.The CTF says the higher spending projections contradict the government's promises to exercise fiscal restraint.“Debt interest payments continue to spiral out of control because government spending continues to spiral out of control,” Terrazzano said.“Carney keeps telling Canadians he’s going to spend less, but he’s on track to spend $13.5 billion over his own budget.”The escalating cost of servicing the federal debt comes as Ottawa continues to run substantial annual deficits, adding to the amount taxpayers must finance through future interest payments.The PBO's figures indicate that debt servicing costs have increased by $34.8 billion annually since 2021-22.Unlike spending on government programs and services, interest payments go toward servicing existing federal borrowing.The CTF argues those costs are placing additional pressure on federal finances and reducing the money available for other priorities.The organization is urging the prime minister to use the upcoming federal budget to reduce expenditures and limit additional borrowing.“Carney needs to put down the credit card and cut spending in the upcoming budget because taxpayers can’t afford these debt interest charges,” Terrazzano said.
