Into the red we go!

Taxpayers Group Relaunches Federal Debt Clock
Paul Vieira, Financial Post

February 25, 2009

OTTAWA -- The Canadian Taxpayers Federation said Wednesday it was relaunching a federal debt clock now that the Conservative government is set to run up $85-billion in deficits over a five-year period.

Available at http://www.debtclock.ca/, it shows that the federal debt stands at roughly $458-billion, or $13,685 per Canadian taxpayer. The federation said the national debt is now growing at a rate of $34.88 per second.

"... Bad spending decisions today hurt the taxpayers of tomorrow because they are the ones left to pay off the large and growing federal debt," said Kevin Gaudet, the federation's federal director. "Saying yes to spending is easy. Saying no is difficult. Politicians need to make tough decisions now, for the sake of future taxpayers."

The debt clock was retired in 1997 once Ottawa was on track to record its first budget surplus in 28 years.

On a historical basis, however, the current federal debt stands at 28.6% of GDP – well below the nearly 70% mark the country hit in the mid-1990s. According to the latest budget, the debt-to-GDP ratio will hit a peak of 32.1% in 2010-11 and then drop below the 30% mark two years later.

The Conservative government engaged in deliberate deficit spending in an effort to combat the global financial crisis that is dragging the world economy into negative territory. Also, the move appeased political opponents after the Conservative government was nearly defeated following a fall economic statement that included no fiscal stimuli and questioned whether it would be needed.

The budget includes a two-year, $40-billion stimulus package that, when combined with contributions from the provinces and some municipalities, will come to 2% of GDP, or what the Group of 20 nations agreed upon in meetings late last year.