Let’s discuss Canada’s national debt from the perspective of a total outsider from the US.
Carney's proposed spending, which will increase debt, is somewhat similar to Biden's actions. Investing in the future yields positive economic results. i.e., the infrastructure bill and tax incentives for clean energy, new manufacturing plants, suspending student loan debt, and many other bills he got passed to help the middle class and an investment in the future of the US. Many plants were open, like in Ohio, with the opening ceremonies or ribbon-cutting, the Republicans who had voted against the bill were now praising it as if they had been for it, when they had not.
The Biden tax credits enabled the purchase of massive TSMC fab plants for the most advanced chips, bringing them to Phoenix and other new fabs across the US, thereby investing in a high-tech future and creating numerous high-paying jobs. Spanning over 1,100 acres, the site is planned to eventually house up to six fabs. As of now, three fabrication plants have been launched, accompanied by two advanced packaging facilities and one R&D center, collectively forming a full-scale semiconductor manufacturing ecosystem. These are examples of good debt, as revenues decreased due to the tax credits. Just like much of Carney's proposals..
The Harris platform prioritized increased spending to improve lives, including child care and other essential services, thereby freeing up parents to be in the workforce. We have near-record-low unemployment and an economy that most of the world envies —until Trump.
Now up there... in Canada. You have a very low debt-to-GDP ratio compared to the rest of the G7, and there is room for "growth debt."
When the Canadian government takes on debt, it is mainly owed to yourselves. Most of Canada’s federal debt is held domestically—through Government bonds purchased by pension funds, banks, including the Bank of Canada, and even individual Canadians. Your debt is widely circulating within your economy, affecting Canadians.
Much of what Cary is proposing is to invest in long-term value such as healthcare, Transit & infrastructure, Skills training, Affordable housing • Clean energy, Child care etc..
The things that build a country and foster economic growth. It's like a business borrowing to buy real estate for expansion, or to purchase robots for greater efficiency, or other machinery or equipment. This is called investment and is seldom paid for out of current operating expenses; instead, it is typically funded by issuing bonds, equity, or through bank financing or lines of credit.
Think of it like a business borrowing to upgrade its equipment. It’s not waste—it’s an investment.
If Canada invests $1 billion, it should amortize that investment, just like a business would, considering depreciation on real estate, even if the value increases under US Generally Accepted Accounting Principles (GAAP). Perhaps consider it a cost over, such as a 20-year benefit period. Some of the benefits are intangible, making families feel more secure, while others are tangible, including higher wages and income taxes paid to Canada, as well as various other taxes.
Currently, Canada’s debt-to-GDP ratio stands at approximately 50%. You also have an AAA credit rating by Moody's, among others, which is better than the US. Your debt-to-GDP ratio is relatively low compared to your G7 peers: U.S.: ~112%, Japan: ~205%, France: ~93%, Italy: ~132%, UK: ~100%. and Germany: ~45%
Canada has an AAA credit rating from Moody’s, which is a few steps stronger than the US. Global markets trust Canada to pay its bills, and that translates to lower borrowing costs and long-term financial stability.
Was COVID borrowing reckless? No. It was an emergency response aimed at preventing economic collapse and averting numerous business and family bankruptcies.
Back in the late 90s, your ratio was close to 70%, but you brought it way down with the US/Musk Chainsaw massacre of most agencies and programs, which is the opposite of investment in the future.
Interest payments are relatively low, especially since most of your long-term debt is locked in at much lower rates. New debt will be more expensive, but it will still be a relatively small part of your annual budget, far less than in the US.
That’s what smart debt looks like. It’s not just about the money—it’s about what we’re building with it.
Often, the best investments don’t just appear on a balance sheet. But in
Classrooms, Hospitals, Roads and broadband, Stronger families, and Smarter workers
Just the facts, not ravings like from Trump, why Canada should be the 51st State:
"We don't need them to make our cars, we make a lot of them, we don't need their lumber because we have our own forests... we don't need their oil and gas, we have more than anybody."
Trump reiterated the assertion that the US has a trade deficit with Canada of between $200 billion and $250 billion. It's unclear where he obtained that figure. The trade deficit with Canada, expected to be $45 billion in 2024, is primarily driven by US energy demands.
Just the facts, not rants and misinformation on social media vs real journalists (most of whom left the Fox News division, not able to stand the misinformation of Fox and related propaganda talking points vs facts and science.
