The Parliamentary Budget Office (PBO) on Wednesday warned interest costs on the national debt will hit $70 billion by 2029. It compares to a pre-pandemic debt servicing charge of $24.4 billion annually, according to Blacklock’s Reporter. “Public debt charges have increased significantly over the last three years due to a substantial increase in the stock of public debt over the course of the pandemic combined with subsequent higher effective interest rates,” said a PBO report. “Post-2025 the effective interest rate is expected to stabilize, slowing the growth in public debt charges.”“The Budget Office projects that public debt charges will reach $69.9 billion by 2029.”The figure eclipses projected federal health care spending of $64.8 billion a year by 2029..Parliament has not balanced a budget since 2007. The federal debt ceiling under the Borrowing Authority Act last year was raised from $1.83 trillion to $2.13 trillion.The latest debt servicing figures follow 2024 focus group research by the Privy Council that indicated Canadians were increasingly wary of federal overspending.“A number expressed concerns about the national debt and believed a greater focus needed to be placed on maintaining balanced budgets in order to ensure the debt did not rise further,” said the report.Asked to rate cabinet’s management of the economy, “a large number felt that the Canadian economy had not been well managed in recent years, citing perceived issues such as high interest rates, the rising cost of living, a growing national debt and continued deficit spending by the federal government."“A few believed the Government of Canada had placed too high a priority on providing financial and or humanitarian assistance to other countries and felt that it needed to place an increased focus on addressing the economic challenges faced by those living in Canada,” said the report.“Asked whether they felt the Government of Canada was on the right track when it came to its management of the economy, very few believed that it was.”.The Department of Finance in a May 30, 2024 submission to the Commons finance committee said it expected the national debt to eclipse a record $1.8 trillion within a year.“The increase that is being recommended this year is as a result of total borrowing approaching the $1.83 trillion number,” testified Alexander Bonnyman, director of debt management.“The Government of Canada is pushing up against the $1.8 trillion?” asked then-Conservative MP Marty Morantz (Charleswood-St. James, Man.). “The increase is as a result of the borrowing needs,” replied Bonnyman.
