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As shown in figure 1.2, total government net debt in Canada (financial liabilities net of government assets as a percentage of the GDP for all levels of government) peaked in 1995 at 71 percent. With the actions taken by Canadian governments, net debt fell to about 22 percent of the GDP by 2008. In figure 1.3, which focuses on gross debt, the debt burden peaked at 101 percent of the GDP in 1995-1996 and fell to 70 percent by 2008.
The world dramatically changed in 2008, when the financial crisis radically impaired the global economy. With the world recession, governments, including the Canadian government, faced falling tax receipts and higher spending associated with unemployment and stimulus expenditures. Canada’s net debt is expected to climb to about 33 percent of the GDP in 2011 (and the gross debt to over 80 percent of the GDP) according to
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