저자: ParthSoni · 외국인
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캐나다 부채 증가(정부 시장부채 2025~26년 약 1.6조 CAD 전망, 순부채/GDP 65.9%→74.8%)와 가계부채(가처분소득 대비 약 171%)를 레이 달리오의 '빅 데트 사이클' 경고 신호와 대조. 연방 재정적자는 GDP 대비 약 1.6%로 G7 대비 낮아 완충 요인이라고 평가. 현재는 위기 직전이 아니지만 금리 충격·성장 둔화·주정부 부채·인플레이션·신뢰 하락이 겹치면 위험이 커질 수 있다고 주장. 자산 가격에 대한 구체적 투자 조언은 없음.
다듬은 글
Canada is known as safe and stable country. But what if the stability is hiding some big problems behind it? What if Canada's growing debt could actually trigger some serious crisis? In this book, How Countries Go Broke by Ray Dalio explain the warning signs? Something he calls the big dead cycle. So today, let's see could Canada be on that path.
What would need to go wrong for this to happen? and how real the risk is. By the end of this video, you will understand the dangers, what to watch for, and the choices Canada has ahead. Hello everyone, my name is Par Sunni. I'm a realtor based in Ontario. If you like this kind of content, do follow and subscribe my channel.
So, first let's define what going broke means. Now, Dario doesn't always means literal insolvency or bankruptcy. instant. What he means is a collapse in the ability of a government or a country to meet its financial obligation in a stable way. Skyrocketing debt service, loss of confidence, inflation, maybe a default or maybe external intervention or restructured all this consider under this.
Now to understand this we need to understand the big debt cycle and the key component of Dalio's big debt cycle is number one the very first one in this is the excessive borrowing both by government household and also on the corporate side the second in this one is the debt service burdens rising it is interest payment becoming a big fraction of revenue or incomes is the loss of competitiveness or productivity you can't grow your way out of this easily and this is something we will discuss later on this quickly.
The fourth on this one is the fiscal policy stress like printing more money, devaluation, inflation and things like that falls under this bucket. The last one on the list is the confidence meltdown. Now this could be like investor, citizen lose faith in the country, borrowing cost, good spy, price of default.
Now let's look at Canada through this lenses. Now here are some of the hard numbers as of right now and all these numbers are from legit website. Now according to debt management strategy 2025 and 2026 Canada's total market debt is projected to reap 1,619 billion by the end of 2025 2026 and over here if you see this is again the screenshot from canada.
the official website if you see 2122 22 23 it says all the debt in 21 and 22 fiscal year we have a total market debt of 1,232 billion and the projected for 2025 and 2026 is 1,616 billion. Now Fraser Institute reports that combined federal pro provincial net debt to GDP is expected to rise from 65.9% in 2020 to 74.8 8% in 2025 and that is a big jump in just couple of years and that's a big increase in a short time.
Now what does this means for everyday Canadian in a normal language so a higher debt usually means more on your tax dollars will going towards the interest instead of health care schools or tax relief. If the debt keep rising in this manner, the government may have to raise taxes, cut services or even have to borrow money from outside which can slow down the economy.
So for the public, it's generally bad news in the long run. It puts pressure on the household and also limits what government can do to help when the times get tougher. Now at the federal level, the debt to GDP ratio is projected to decline slightly from 42.1% in 2023 2024 to about 39.2% by 29 2030.
But that's if no large spending measures are introduced in many temporary measures expires. Now let's talk about the deficit trend in this one. For 2024 2025, the deficit is expected to be about 50.1 billion that is roughly about 1.6% 6% of GDP by 2029 2030 projected to fall to 24.6 billion that is roughly about.7% of GDP under assumption that the status quo remains the same.
Now at 1.6% of GDP and declining Canada's deficit remains smallest compared to other G7 countries like United States. It does have a 7.6% in 2024 and United Kingdom at 4.3% in 2024. We are at 1.6. So that's a really good news for Canadians. The other one is the household debt. It's very high as of right now.
According to OECD, as of Q4 of 2024, the household debt in Canada is just over 171% of disposable incomes, among the highest in the OEC. So when the debt goes up, servicing cost goes up and deficit still remains present. But Canada isn't yet in the default. Many of these numbers are high but some projections suggest stability if nothing or no drastic change happens in the country or even shaped sign.
Now do Canada current trend matches with the warning sign of dalios what described in the book and where is the Canada war? So let's check this out. Very first one in this one is the excessive borrowing. So if you see over here yes both government and household are borrowing heavily and government debt rising many provinces are running in deficit.
So household carry higher mortgages and credit obligation in this one. Now let's check out how serious this is or the risk factor in this one. So this one for the excessive borrowing the risk is that the interest rate rise further and it squeezes like the inflation squeezes income and then provincial debt may have a weaker revenue basis.
The second factor in this one is the debt service burden higher relative to revenue or the income. So again this factor it is rising for Canada public debt charges are increasing debt to service ratio that is public debt versus the total revenue is projected to rise on this one. That is something what we have seen in the parliamentary budget.
Now what happens if this rate rises more sharply your revenue drops this could become unsustainable and provinces often face tighter constraint in this one. The third factor in this one is the slowing growth or the productivity loss. So basically we have a mixed review in this one. Canada has resources advantages but the risk is the higher cost of housing regulatory barriers and the climate transition global trade pressure.
Now productive growth has been sluggish. If you are seeing all this news, all this reports outside we know in terms of productivity it's not adding up. It's only because we have added more number of people into the country. That's why the productivity chart automat whatever you're seeing it's on the higher side but if you compare to per capita or productivity per people it's not at high now what this could do so if the growth slows or any negative shock hits like commodity crashes or global slowdown the ability to grow out of that it weakens it's very hard to grow out of it.
The fourth in this one is the monetary or the fiscal policy stance. Now there are some signs that we are seeing is that inflation, increased public spending, pressure on federal and provincial budget but Canada still has good credit and ability to borrow us and the major risk if borrowing costs spike or if external debt become significant, it also risk for an inflation induced cost that is like index payments, pensions etc.
And the last on the list is the confidence or the external shocks. So again this there is no way to measure the confidence uh in this one. There is no metric or anything like that. It's just a general poll but that's why it's less clear on this one. So Canada still has a strong institution. I would say does have a stable political environment compared to what you see in the world out there and but the external shock it's always possible.
So we don't know what will happen in this one. Yeah. But this is something to add. If the confidence eros the bond market demand higher for an investor pull back and things could worsen. This is something we have seen in the past. So to summarize this one, Canada exhibits many of the early to medium waring signs.
But there are also buffers like solid institution ability to borrow in its own currency relatively moderate deficit compared I mean compared to percentage of GDP when you're comparing to other countries and the projection that's the under status Q the debt burden might normate and the big question in this one what if the status quo so let's check out what could push Canada over there if certain negative factors alliance Canada could enter a crisis.
Here are the possible triggers or scenarios based on what is happening right now. The very first one in this one is the interest rate shock. If global rates go up steeply or Canada loses the credibility and must pay at a much higher yield. Now debt service in this one will sky. The second one in this one is the economic growth slump.
Now recession, collapse in commodity prices or a global trade disruption reduces revenue. It also slows growth. The third in this one is the provincial debt stress. Now some provinces with lower revenue, higher social spending, weaker economics, hit tougher times. If one or more provinces face default risk, it could strain the federal government or spill over.
Fourth in this one is the inflation or the currency stress. If inflation spikes or if the Canadian dollar loses value, import cost, index payment rises also pressures on household already carrying higher debt. This will affect almost most of the Canadian out there. The bond fifth and this one is the loss of confidence or the investor fund.
Basically, if citor demands higher grade or if the rating agency is downgraded that could force his government to pay more and limit the ability to borrow. Now here are the some of the worst case outcome or worst case scenarios. The very first one is the serious downgrades, higher inflation, higher interest burden consuming large share of revenue, cuts to social programs and possibly a debt restructuring as well.
The best case scenario in this one would be prudent policies, moderate growth, deficit shrinks which we have seen that now debt service remains manageable and the incremental reforms like taxes, spending and the control inflation which is a very necessary part. Now what you need to watch as a normal public as a Canadian.
So if you're wondering can Canada go broke like some other countries in Dalio stories? The answer is not soon but there is a love risk in this one. If the warning sign is ignored and here are what to watch and what must be learned. So here are a couple of watch indicators as a normal topic you should the very first one in this one is the debt to GDP ratio and both federal plus provention.
The second on the list is debt service ratio that is the interest payment in revenues. The third to look at the household debt burdens and delinquency rate. I'll be making a delinquency rate video soon both for businesses and also for households. So, make sure to subscribe to the channel. Fourth and this one is the growth versus inflation versus interest rate trends.
And the other factors could be like credit rating changes like bond yield investor sentiments and so on. So, if Canada does this well, it can avoid the darker dario scenarios but doing nothing or doubling down on deficits spending without regards to the debt service leaves the door open. Now, Canada has many strengths.
The very first one is the stable institution, a diversified economy, ability to borrow on its own currency. But Radalio's lessons remind us that strength doesn't guarantee immunity. The early signs are visible in this one, particularly in the rising debt, increasing interest burden in this one, growing household leverage, but we are not there yet.
Going broke in dio scenarios require a tipping point. So that is a rising debt service, falling growth or loss of confidence in those. Those signs are coming closer than many of us realize it. Thank you so much for watching and don't forget to subscribe. to see you on the next
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