Summary

• Federal debt has risen substantially during the COVID-19 pandemic and is projected to continue rising for the foreseeable future. Large deficits come with costs and Canadians will have to pay for our borrowing today through additional taxation implemented at a later date.
• This bulletin demonstrates that Canadians aged 16 to 80 in 2025 can expect to pay an additional $332.5 billion in personal income taxes over their lifetimes (on a present value basis) to pay for the projected federal debt accumulation since 2019. On average, Canadians between the ages of 16 and 80 will each pay $10,498 in additional taxes.
• Younger Canadians will bear a disproportionately large amount of the burden to pay for the increase in federal debt. For instance, individuals aged 16 to 25 are expected to collectively pay an additional $117.9 billion in personal income taxes over their lifetimes. This translates to 35.5 percent of the total burden imposed on all age groups.
• On a per-person basis, all individuals who are 16 to 25 can expect to pay a lifetime tax burden of at least $20,000 as a consequence of the increase in federal debt. This means that, while the growth of the public debt should be a concern for all Canadians, it should be a special concern for younger Canadians.
• There is also a significant risk for Canadian taxpayers due to the potential for higher interest rates in the future. Specifically, rising interest rates could increase federal debt accumulation and impose a larger tax burden on all Canadians relative to our baseline projections.