Ottawa borrowed heavily without locking in at low rates. The refinancing is getting painful

CdnFox · May 21, 2024

Canada's debt mostly in short term bonds as interest rates reset | National Post

This year $414 billion of Canada's $1.4 trillion in debt will be refinanced — all of it at current, higher interest rates

One-third of Canada’s debt will be refinanced this year at elevated interest rates, a significant cost to taxpayers that Conservatives argue could have been avoided if the government had issued more of the country’s debt in the form of long-term bonds when rates were lower.

Canada has just over $1.4 trillion in debt — more than double the $619 billion owed in the Liberal government’s first year — borrowed using bonds ranging between two and 30 years. But critics point out that the government’s heaviest borrowing, during the COVID pandemic, was done via shorter-term bonds.

This year, $414 billion of the national debt will be refinanced. During the pandemic, the Bank of Canada’s central rate was as low as 0.25 per cent; it’s now five per cent.

During a House of Commons finance committee meeting earlier this month, Conservative MP Adam Chambers argued that the government could have managed its borrowing better by issuing bonds for longer terms at cheaper rates years ago. He compared Ottawa’s short-term borrowing habit to Mexico, which has relied on longer-term bonds.

Gosh - sure would have been nice if our gov't was even as smart as FRIKKIN MEXICO with our money 🙄

Our interest payments will now be more than we spend on medical transfers to the provinces. Think about what That means.