Who Owns Canada's Public Debt?

Remember when thinking about our debt crisis was just scary?

During his recent election campaign, Mark Carney announced plans to add $225 billion (with a “b”) to federal debt over the next four years. That, to put it mildly, is a consequential number. I thought it would be useful to put it into context, both in terms of our existing debt, and of some social and political changes those plans could spark.

How much money does Canada currently owe? According to Statistics Canada’s statement of government operations and balance sheet, as of Q4 2024, that number would be nearly $954 billion. That’s compared with the $621 billion we owed back in 2015.

How much does interest on our current debt cost us each year? The official Budget 2024 document predicted that we’d pay around $51 billion each year to just service our debt. But that’s before piling on the new $225 billion.

We - and the governments we elect - might be tempted to imagine that the cash behind public loans just magically appears out of thin air. In fact, most Canadian government debt is financed through debt securities such as marketable bonds, treasury bills, and foreign currency debt instruments. And those bonds and bills are owned by buyers.

Who are those buyers? Many of them are probably Canadian banks and other financial institutions. But as of February 2025, according to Statistics Canada, it was international portfolio investors who owned $527 billion of Canadian federal government debt securities.

Most of those foreign investors are probably from (relatively) friendly countries like the U.S. and U.K. But that’s certainly not the whole story. Although I couldn’t find direct data breaking down the details, there are some broadly related investment income numbers that might be helpful.

Specifically, all foreign investments into both public and private entities in Canada in 2024 amounted to $219 billion dollars. In that same year, investments from “all other countries” totaled $51 billion. What Statistics Canada means by “all other countries” covers all countries besides the US, UK, EU, Japan, and the 38 OECD nations.

The elephant in the “all other countries” room has to be China.

So let’s break this down. The $527 billion foreign-owned investment debt I mentioned earlier represents around 55 percent of our total debt.¹ And if the “all other countries” ratio in general foreign investments holds true² for federal public debt, then it’s realistic to assume that the federal government currently owes around 11 percent of its debt to government and business entities associated with the Chinese Communist Party.

By all accounts, an 11 percent share in a government’s debt counts as leverage. Given China’s recent history, our ability to act independently in international and even domestic affairs could be compromised. But it could also be destabilizing, exposing us to risk if China’s economy faces turmoil which could disrupt our ability to roll over debt or secure new financing.

Mark Carney’s plan to add another 20 percent to our debt over the next four years will only increase our exposure to these - and many more - risks. Canadian voters have made an interesting choice.

“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” - H.L. Mencken

1. Although I should note that, according to the government’s 2022-2023 Debt Management Report, “in 2022-23, non-resident investors held 29 per cent of Government of Canada securities”.

2. To be honest, there really isn’t enough data available to be confident in this assumption

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