Some debt myths&the fiscal reference tables

The latest fiscal reference tables are now available on the net from the Department of Finance in Ottawa. They make for interesting reading because they show the true situation about the enormous surpluses in Ottawa and the distribution of the outstanding debt among various lenders , as well as the debt to GDP ratios and the trend for this ratio to be shrinking over time. For the details go to google and enter Department of finance, Canada.

A few highlights. The debt to GDP ratio has now shrunk to 33.7 %. for the Federal government making Canada the least indebted country of the G7.The GDP at market prices in 2006 stood at 1.429.8 trillion dollars. The surplus of 13.2$   billion is the ninth straight surplus since 1998.
The total net debt outstanding stands at 481.5 billion dollars. More than $80 billion dollars in surpluses have been used to pay down debt as opposed to finance programmes or investment in infrastructure.

All of the usual explanations for the lack of money to finance necessary improvements in the health care system are clearly false. There is plenty of money available.

Even if Canada had spent the 80 plus billion on essential investments in health care, education and infrastructure the debt ratio would have shrunk significantly anyway because of the steady growth in the GDP.

In 2005/06 the Federal government ran an operating surplus, that is the difference between tax revenues and net debt management expenditures of 46.9 billion dollars.Total unmatured debt held by parties outside the government amounted to 421.2 billion dollars. 279.1 billion was in the form of marketable bonds, 131.6 billion in the form of T bills and 17.3 billion in the form of Canada savings bonds.

Contrary to the false impression often given Canada owes very little of its debt to foreigners. As of 2006 only 13.7 % of the debt was held by foreigners. The rest of the marketable bonds, treasury bills and Canada savings bonds were held by Canadian savers, financial institutions and pension funds as well as the Bank of Canada.

The provinces are also running a large surplus of over 13 billion dollars and the provincial debt to GDP ratio stands at about 20 %.
Gross debt substantially exceeds net debt and actual financing requirements were typically less than the deficit when the country was runing deficits because of the typically positive value of off budget items