MNI BRIEF: Canada Interest Cost 11% Of Revenue, Most Since '12
MNI (OTTAWA) - Canada's interest costs rose to the highest since 2012 at 11.2% of revenue in Q3, the kind of fiscal expansion criticized by Justin Trudeau's opponents before he stepped down from the role of prime minister Monday.
That measure was up from 9.9% a year ago and a low of 5% at the start of 2021, and illustrates the challenge future leaders face slimming deficits or finding cash for priorities including incoming U.S. President Donald Trump's demand for higher security spending. Statistics Canada provided historical comparisons to MNI late Thursday. Interest costs still remain historically low compared with GDP, at around 2%.
Federal government staffing costs also climbed 7.4% from a year earlier or by CAD1.1 billion, the Ottawa-based agency reported.
Trudeau is leaving March 24 after a contest to replace him begins, with his popularity bottoming after Chrystia Freeland's resigned as finance minister and refused to deliver a fiscal update she said contained gimmicks instead of a focus on dealing with Trump's economic threats. Trump says he wants Canada to spend more securing the border and reach its NATO target of spending 2% of GDP on defense. (See: MNI: Trudeau Deficit Unlikely To Fix Canada's Vibecession)