Canada's Debt Burden Plummets, Attracting Investors and Lower Borrowing Costs

Canada's borrowing costs have reached an impressive milestone, ranking third lowest among G7 countries. A recent shift in the country's debt burden has made it more attractive to investors and resulted in lower borrowing costs.

In the mid-1990s, Canada's central-government debt stood at a staggering 64% of GDP. However, by 2024, this number had decreased to 52%, making Canada the only G7 country with a lower debt burden than in 1995.

This significant reduction in debt has not gone unnoticed, and as a result, Canada's appeal to investors has increased. The country's borrowing-cost advantage is now being preserved by policymakers who are committed to continuing to reduce the debt burden and renewing the Bank of Canada's inflation-targeting agreement.