Canada’s central-government debt once was the second-highest in the G7, standing at 64 percent of GDP in 1995. By 2024, Canada reversed that position, reducing its debt burden to 52 percent of GDP and becoming the only G7 country with a lower debt burden than in 1995, even as the G7 average climbed from 61 to 97 percent. That fiscal restraint has strengthened Canada’s appeal to investors and its borrowing-cost advantage – an advantage policymakers should preserve by continuing to reduce the debt burden and renewing the Bank of Canada’s inflation-targeting agreement. For more read the recently published Intelligence Memo.
Source: IMF Global Debt Database; Drummond and Dahir (2026).
Note: Central-government debt is gross debt issued by the central or federal government.
