Tuesday 20 April 2021

Canada pledges nearly $50B in spending in new budget

Global News shows that Chrystia Freeland delivered her first budget as finance minister on Monday and it included some big-ticket items. Spending in the budget document is nearly $50 billion and the federal deficit is expected to be about $354 billion. That will push the national debt past the $1 trillion mark for the first time. Global News’ David Akin has an overview of the government’s ambitious spending plan.

Governments can create debt by issuing government bonds and bills. Some countries may be able to borrow directly from a supranational organization (e.g. the World Bank) or international financial institutions.

Keep in mind, the Debt-to-GDP ratio compares a country's total debt to its total economic output. This ration is used to measure the country's ability to pay its debt. If the ratio is high, it indicates the country isn't producing enough to pay back its debts. A low ratio means the country is producing enough to pay back its debts.

It seems that there are countries in the world that are not in debt. Singapore and several other (very small) nations are debt-free.

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