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Each Canadian Taxpayer Owes $171,032 to Government's $2.7 Trillion Debt |
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Written by Staff/Wire
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Tuesday, 14 November 2006 |
Do you believe that finally, after years of financial planning and scrimping that you're finally debt-free? Think again. According to a study released today by the Fraser Institute, every Canadian taxpayer owes the combined three levels of government a whopping $171,032.
The report titled "Canadian Government Debt 2006" finds that the combined debt of federal, provincial and local governments have accumulated $798 billion in direct debt and more than $2.7 trillion in total government liabilities. Liabilities include direct debt and government programs such as Old Age Security and Canada's public health care system.
Niels Veldhuis, Senior Research Economist and co-author of the report says that the net direct debt fell during from 1999 to 2004 but the decline is negligible compared to the growth of the country's debt since 1991. Veldhuis admits that the decline in direct government debt is a "welcome development" but he went on to say, "The greatest concern for taxpayers is the growing unfunded liabilities associated with programs such as Old Age Security and Medicare."
The report also indicates a 19.7 per cent increase in such unfunded liabilities as Medicare, the Canada Pension Plan and Old Age Security totalling $1.5 trillion. The original funding assumption for the three programs was based on population demographics, economic growth rates, and wage growth in the 1960s. All three programs were initiated during that decade. The funding policies at that time involved transfers of small amounts of money from large groups of younger workers to benefit small groups of poor retirees. It has since been discoverd that these assumptions were completely false taking into consideration that fewer babies are being born, personal incomes have stagnated and people are living longer.
According to the report Ontario, Quebec and Alberta carry the largest total liabilities per person with PEI carrying the least. All provinces except Alberta have total liabilities
greater than 200% of annual gross domestic product (GDP).
The complete report can be seen here: fraserinstitute.ca/shared/readmore.asp?sNav=pb&id=866 |
