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  • Writer's pictureWayne Drury

Will a Circular Economy save us from Debt do us Apart – Part II

Updated: Jun 26, 2023

Canadian Deb To Pass $2.1 Trillion in 2023


I do not think this is a time to gloat - so I won't. At Sustainable Circular Economy, we called the 2023 debt over $2 trillion a couple of weeks ago.

This is a serious issue for us and our country's future. I know I am not saying anything many already know, but how do we get folks to understand the truth and consequences and act.?

A friend told me there are two types of people: I am not a behavioural scientist; there may be one out there who can tackle the job to provide insight into human behaviour and address debt.


Is it that folks do not see any chance to make a difference, so they do not try? Is it that folks are too worried about the direct impacts on their families? Or is it a sense of entitlement with the millennials where they think it is not their problem?

Some may not like the Fraser Institute, but that is not the issue today. The problem is the ballooning Canadian debt. The numbers are hard to ignore - well, maybe because we do not hear much about the debt - but the chickens will come home to roost. The question in my mind is, "when?"

It is the Fraser Institute that is the genesis of this story. Their numbers report the ballooning debt, which 'they suggest will "exceed $2.1 trillion in 2022 - 2023, nearly double what it was in 2008.” This is closely aligned with what was reported a couple of weeks ago.

The Fraser report says that the debt-to-gross-domestic-product (GDP) ratio is expected to grow from around 66 percent to nearly 75 percent.

The question. What is the trigger point for a financial disaster with the debt-to-gross domestic-product ratio? We throw numbers around like footballs - but when is too much too much?


The federal and provincial governments are on track to have collectively accumulated $395.9 billion (inflation-adjusted) in total net debt between 2019/20 and 2022/23, an increase of 23.4%." That is more than $100 billion annually, raising the per person portion to $47,070, an increase of $12,279 per person.

The Bank of Canada interest hikes will not only affect Canadians at home, but increasing interest payments are something the federal government has to deal with. And just like us at home, the federal government has few choices:

  • Cut spending in some areas and assign funds to pay the debt

  • Print more money which would severely affect the value of the Canadian dollar and the pricing for everything we buy.

  • Cut back on discretionary spending - reduce programs and services.


In a recent article, we discussed the impact of government spending on Canadian families. There are thousands in peril of defaulting on their debt. And now, we have this increase in federal debt to contend with.

The burden falls on Canadian families today and in the future. Like households, governments must pay interest on their debt, and that interest ultimately is raised by Canadians by way

of taxes. Servicing the debt also diverts resources from other things we hold dear, such as health care and education. And that is about it—higher personal family costs in the form of increased taxes and lower service delivery.


Higher interest rates are well known, but for many, the impacts are being ignored. Many people may need more preparation for what is coming for mortgage debt renewals or the cost of increasing credit card interest.

The federal government is ignoring the impact of higher interest rates on the Canadian taxpayer, which has seen the Bank of Canada rate rise from 0.0025%% in 2020 to 4.8% in 2023.

For each 1% of an interest rate hike, the impact on the federal debt is $9.3 billion. Today, an additional $33.5 billion is required to service the debt.

Where is the money to come from? Right out of our pockets

Is it no wonder Trudeau will not back off on the $0.27 increase in Carbon and Clean Fuel Tax? The federal government will collect an additional $0.40 per litre on average across Canada - that equals $62 million per day and $22.5 billion per year. Just another "hidden" tax right out of our pockets. There is the additional revenue, the hidden tax to pay for the government's largess.


We have beat this topic enough. The bottom line - our country, which was once strong and free, is no more. We are burdened with debt and a big hole to crawl out of.

Some suggest there is no chance to consider a balanced budget for 25 - 30 years. How can we balance the budget with all the demands and new demands, such as $180 billion in costs to bring in EVs by 2030?

A typical family now must face mortgage increases, inflationary pressures, increased taxes, and cuts in services. This will continue; the problems are easy to create but very difficult to get out of. From Sustainable Circular Economy, our best wishes and wish it was better. It is not.

Sustainable Circular Economy

Vancouver, Canada


Wayne Drury is CEO of Sustainable Circular Economy, a boutique firm in Vancouver, Canada, helping businesses and First Nation communities to arrive at environmentally sustainable solutions that are sustainable for the people and the planet based on a circular economy of reuse, repurpose, and recycle.

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