Ottawa is spending nearly one-third more than it was in 2019 before the pandemic.
interest rates
Government borrowing crowds out private investment and lowers the economy’s productive potential.
With interest rates rising, it's all the more important for governments to carefully manage money.
Federal debt interest will cost a projected $42.9 billion in 2026/27.
Ramping up interest rates at this juncture places more of the burden of fighting inflation on consumers.
The move by governments worldwide to substantially reduce the use of carbon fuels will likely produce even slower productivity growth.
If the inflation rate remains relatively stable over time, suppliers should know when higher prices signal increased scarcity.
A one percentage point increase in the effective interest rate would increase Ottawa's annual debt interest costs by $13.8 billion.