CIA Unit 3 Acitvity 5: Government Budget Options
Compared to the rest of the world, Canada’s debt ratio is considerably high and has been fluctuating recently. With Canada having the largest deficit in recent history ($54 billion) , analysts and experts hope it can bounce back. Canada’s debt-to-GDP ratio, however, is expected to drop in coming years to 31.9%, while our current ratio stand at 35.4%. This is a huge improvement from the 1990s, where Canada’s debt-to-GDP ratio hovered around 70%.
Other countries such as the United States of America and Japan have been struggling a lot more than Canada with deficits and debts lately – the US’ debt-to-GDP ratio is estimated to be close to 100%, whereas Japan’s is a whopping 200%. America’s deficit sits at 11% of their national GDP, which leads to chaos in the trade market, a price increase in imports (which leads to less people buying abroad) and the American dollar becoming cheaper. Some experts even go as far as to predict another recession in the US due to these factors. Canada might not be a perfect country with no deficits, but it is far away from such high deficits and economical ratios as the United States of America. Canada lingers well below the average debt-to-GDP ratio of other nations, and it has been improving slowly.
I think Canada’s economy will only get stronger, with an increase in Gross Domestic Product and a variety of growth opportunities, and with plans to completely eradicate Canada’s debt by 2021, future generations of Canadians have a seemingly bright future -economically and financially - ahead of them.