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Despite the surpluses the three levels of government have collectively posted since the late 1990s, Canada still has a debt challenge to face. The government spending legacy from the 1970s to the mid-1990s has left Canadians shouldering a debt burden of $798.4 billion as of March 2004, or $25,044 for every person in the country.
The federal government has had the best success drawing down its debt. Yet it also carries the largest share of liabilities, $523.3 billion worth as of March 2005. On a per capita basis, net federal financial debt shrank from $18,850 to $16,270 in the decade since 1995.
In 2006, 15 cents of every dollar the federal government spends goes to interest charges on the debt. Still, this is an improvement over 1995, when Ottawa spent nearly 27 cents of every dollar on debt charges.
The provincial and territorial governments have had varying experiences managing their debt burdens. Over the past decade, Canada’s biggest provinces—Quebec, Ontario and British Columbia—have also incurred the largest annual deficits, increasing their overall debt burden every year. However, Manitoba, Saskatchewan and New Brunswick have mostly seen annual surpluses and have been reducing their debt. Alberta has posted large surpluses in recent years and has completely eliminated its debt.
As of March 2004, all provinces except Alberta were carrying debt. Yukon and the Northwest Territories have been debt free over much of the past decade.
Canada’s villages, towns and cities are also debtors, although they owe far less than the other levels of government—a net total of $11.4 billion in 2003.