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  Budget 2020-2021

How is the size of the debt measured?

The best way to measure the extent of a government’s indebtedness is to compare its debt with the size of the economy. This allows to establish the debt weight, or debt burden. The indicator used to measure the size of the economy is called Gross Domestic Product (GDP). The debt-to-GDP ratio is then calculated.

Briefly, GDP:

  • represents the total value of goods and services produced in an economy during a given period.
  • is the source of the revenue the government collects to finance its activities, including payment of debt service.

Comparing a government’s debt to GDP is similar to what is done, for example, for a person who wants to borrow to buy a house. The amount of the debt (mortgage, car loan, etc.) is compared to this person’s income to assess his or her level of indebtedness.

Change in the gross debt burden and impact of the Generations Fund

The Generations Fund contributes directly to reducing the debt burden.

As at March 31, 2020, the gross debt burden will stand at 43.0% of GDP. It would have stood at 47.3% of GDP, or 4.3 percentage points higher, if the deposits in the Generations Fund had been excluded.

This difference means that if the government had not created the Generations Fund in 2006, the gross debt forecast as at March 31, 2020 would be $19.9 billion higher.

Gross debt as at March 31 - Percentage of GDP
Gross debt as at March 31 (percentage of GDP)
  2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
With the Generations Fund 50.1 51.9 52.9 53.2 54.2 54.3 54.3 52.9 51.5 49.6 47.1 47.9 47.1 45.9 45.0
Without the Generations Fund 50.8 52.8 53.9 54.4 55,7 56.1 56.4 55.4 54.5 53.0 52.9 52.2 51.9 51.3 51.0

The gross debt per capita as at March 31,2020 will stand at $23 298, whereas it would have stood at $25 647 excluding the deposits in the Generations Fund, a difference of $2 349 per capita.

Gross debt as at March 31 - dollars per capita
  • In 2018
    • Without the Generations Fund: $26 012
    • With the Generations Fund: $24 367
    • A difference of $1 645
  • En 2023
    • SWithout the Generations Fund: $28 213
    • Without the Generations Fund: $24 908
    • A difference of $3 305