Combined federal and provincial government debt in Canada has nearly doubled from $1.21 trillion in 2007/08 (the year before the 2008 financial crisis) to a projected $2.30 trillion in 2025/26, finds a new study released by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Government debt—federally and in most provinces—has grown substantially over the past 17 years, since just before the 2008 financial crisis, creating serious fiscal challenges for Ottawa and provincial governments in the years ahead,” said Jake Fuss, director of fiscal studies at the Fraser Institute and co-author of The Growing Debt Burden for Canadians: 2025 Edition.
Jake Fuss
The study specifically measures net debt, which is a measure of the total debt of the federal and provincial governments minus financial assets held by the governments. It is a common measure of indebtedness, said the organization.
The study finds that not only has Canada’s projected combined government debt (the federal debt and the provincial debt of all 10 provinces) nearly doubled since 2007/08, the year before the 2008 financial crisis, but the combined debt now equals 74.8 per cent of the Canadian economy (GDP). For perspective, debt represented 53.2 per cent of GDP in 2007/08, it said.
“It’s important for Canadians to understand the magnitude of the country’s combined government debt because deficits and debt today mean higher taxes in the future,” said Fuss.
The report found:
- Newfoundland and Labrador has the highest provincial-only debt as a share of the economy (GDP) among the provinces at 44.9 per cent in 2024/25.
- At the same time, Alberta recorded the largest increase in its provincial government debt as a share of the economy—specifically, between 2007/08 (-13.4 per cent of GDP) and 2024/25 (7.8 per cent)—an increase of 21.2 percentage points. However, Alberta’s provincial debt as a share of the economy in 2024/25 remains the lowest in the country.
- Quebec, which was the longstanding most indebted province, now has a debt-to-GDP ratio of 38.6 per cent, ranking it second highest amongst the provinces.
- On a per person basis, the combined debt (including provincial debt plus a portion of the federal debt) this year ranges from a low of $40,939 in Alberta to a high of $68,861 in Newfoundland & Labrador. Quebec has the second-highest combined debt per person ($60,491) in 2024/25.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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