Our ability to raise our level of infrastructure investment
is constrained by our increasing debt load.
Among the OECD our debt burden is the 10th highest—representing nearly 115% of GDP, putting us alongside Spain,
the United Kingdom and France. Compared to other OECD nations, however, our debt burden is growing at a slower rate,
at just 2.4% per annum over the last 10 years instead
of the OECD average of 4.5%.
In addition, much of our recent debt growth has occurred at the provincial rather than at the federal level. Some provinces, like Ontario and Manitoba, have seen their net debt to GDP ratios grow by over 40% over the past decade.
By contrast, federal net debt to GDP has been relatively constant. That creates a fiscal imbalance when it comes to infrastructure. Province and municipalities are responsible for a major share of infrastructure costs, but their growing debt burden will make it hard for them to continue doing so.
This trend is one reason why greater coordination between orders of government is required, and why many observers suggest a bigger role for private capital, from domestic players such as Canadian pension funds as well as international investors.