In this series, we’ve reviewed the shaky fiscal status of France, Italy, the United Kingdom, and Japan.

Today’s column looks at Canada.

As we’ve done with the other nations, here’s a summary of how fiscal policy has deteriorated in the 21st century. The main takeaway is that government spending now consumes 44.6 percent of GDP, a somewhat significant increase since 2000.

Canada also has gross debt of more than 100 percent of GDP.

However, like Japan, Canada’s net debt is much lower because the government has accumulated private assets in funds designed to help fund future entitlement spending.

But unlike Japan, net debt is very low in absolute terms.

This makes it seem like Canada is unlikely to be the first domino.

And that seems like the right conclusion when comparing interest rates on 10-year government debt to other nations. Interest rates for Canadian debt have increased (blue line), but remain below the average (black line).

However, we’ll close with some worrisome data.

If we replicate the first chart, but start in 2014 instead of 2000, you see a much bigger deterioration over the past 10-plus years.

Indeed, the spending burden actually declined between 2000-2014, but has since spiked.

This raises an opportunity to explain that most nations suffered spending spikes during the financial crisis (2008-2010) and the pandemic (2020-2022).

Unfortunately, many nations (and definitely Canada following the pandemic) used those spending spikes as an excuse to permanently expand the burden of government.

Unsurprisingly, Canada has also suffered anemic growth over the past 10-plus years.