N環球 
Budget watchdog warns: Canada's debt interest now tops health transfers ahead of Nov. 5 budget
Parliamentary Budget Officer Annette Ryan warns federal debt charges, at $59.3 billion this year, now exceed Canada Health Transfer payments to the provinces — and says the government's two fiscal anchors impose 'very little fiscal discipline.'
Why it matters
With less than two weeks to go before the Carney government's budget on November 5, Parliamentary Budget Officer Annette Ryan has delivered a blunt warning in both her October 20 Economic and Fiscal Outlook and her October 22 testimony to a House of Commons committee: federal spending, borrowing and debt are all rising while economic growth slows.
The headline number: federal debt charges are projected at $59.3 billion this year, more than the $57.4 billion Canada Health Transfer paid to the provinces. Ryan told the committee debt interest is 'the fastest growing element in the budget.'
Full report
The PBO outlook projects debt charges rising from $59.3 billion this year to $83.0 billion by 2030–31. Per Canadian, the interest bill rises from $640 in 2021–22 to $1,419 this year and a projected $1,952 by 2030–31.
The outlook also projects the federal debt-to-GDP ratio rising every year, from 40.8 per cent in 2026–27 to 42.6 per cent in 2030–31 — the opposite of the declining ratio promised in the election campaign. Asked at the hearing whether that was the opposite of the promise, Ryan answered: 'Mathematically, yes.'
Over the next five years the outlook projects cumulative deficits of $333.3 billion but federal borrowing rising by $732.9 billion, because borrowing also finances loans to Crown corporations, capital investment, defence procurement and other financial assets that do not show up in the deficit.
Ryan was equally direct about the government's two fiscal anchors — a declining debt ratio and a balanced operating budget: 'These two anchors impose limited fiscal discipline on government spending and borrowing.' She also blamed the U.S. tariff war in part for the weaker growth forecast.
The Finance Department says the government remains committed to balancing its operating budget ahead of schedule. The November 5 budget will be the first formal test of both claims.
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