The Effect of Government Debt on Economic Growth in the Canadian Provinces
— Published on November 7, 2024
- Provincial and federal government debt has grown significantly in recent years.
- A growing body of literature links government debt to slower economic growth.
- We provide a three-phase analysis linking government debt to slower growth among Canadian provinces.
- Once debt exceeds 100% of GDP, additional debt offers no benefit in terms of short-term economic growth.
- As of 2022, all but three provinces—British Columbia, Alberta, and Saskatchewan—had combined federal and provincial debt loads in excess of the 100% debt-to-GDP threshold.
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