CALGARY, AB – A study released by the Fraser Institute, a Canadian public policy think tank, concluded that Canada’s government finances deteriorated more rapidly than any other G7 country over the preceding decade (2014-2024). The analysis highlighted significant increases in government spending and debt relative to the nation’s economic output.
The Fraser Institute report, which based its data on reports from the International Monetary Fund (IMF) available at the time of its publication, found that while Canada’s overall financial standing wasn’t the worst among the Group of Seven (G7) industrialized nations, its trajectory was a growing concern. “And while it’s true that Canada’s finances aren’t as bad some other countries, the data show Canada’s finances are deteriorating fastest in the G7, and if we’re not careful we may lose any advantage we currently have,” the Fraser Institute authors Jake Fuss and Grady Munro stated in their commentary accompanying the study.
The above chart displays the overall change in general government gross debt as a share of GDP across G7 countries from 2014 to 2024. Among these nations, Canada experienced the most significant rise, with its gross debt relative to GDP increasing by 25.23 percentage points over the decade, shown as the largest increase. This change was considerably higher than the next closest increases in France (+16.97 percentage points), the United States (+16.36 percentage points), and the United Kingdom (+14.13 percentage points). In contrast, one G7 country achieved a notable reduction in its general government gross debt as a share of GDP, which fell by 10.63 per cent during this period, while other member nations recorded more modest increases.
According to the Institute’s findings, Canada’s general government total spending as a share of Gross Domestic Product (GDP) reached 44.7 per cent in 2024, ranking fourth highest in the G7. More strikingly, the report detailed that from 2014 to 2024, Canada saw the largest increase in the size of government among its G7 peers. “Canada observed the largest increase in the size of government of any G7 country, as total spending compared to GDP increased 6.34 percentage points over the decade,” the commentary noted. This rise was reportedly almost triple the increase seen in the United States.
This second chart shows the overall change in general government total spending as a share of GDP in G7 countries from 2014 to 2024. Canada observed the largest increase in the size of government of any G7 country, as total spending compared to GDP increased 6.34 percentage points over the decade. This increase was nearly three times larger than the increase in the U.S. (+2.27 per cent), and both France (-1.23 per cent) and Italy (-0.15 per cent) actually reduced their size of government during this time.
Similarly, Canada’s general government gross debt stood at 110.8 per cent of GDP in 2024, placing it fifth highest in the G7 based on the data used in the 2024 report. However, the increase in this debt ratio over the decade was again the most pronounced. The study found that Canada “experienced the largest increase of any G7 country [in general government gross debt as a share of GDP] at 25.23 percentage points” between 2014 and 2024. This outpaced increases in countries like France (16.97 percentage points) and the U.S. (16.36 percentage points).
The Fraser Institute’s analysis emphasized that such G7 comparisons are often used by policymakers as a barometer for Canada’s fiscal health. In their May 2024 commentary, Fuss and Munro wrote, “Indeed, based on his oft-repeated goal to “build the strongest economy in the G7,” Prime Minister Carney himself clearly sees the G7 as a good comparator group for Canada.”
The authors of the Fraser Institute commentary also pointed to economic research suggesting negative consequences when government finances expand too rapidly. “Research suggests that when government spending exceeds 32 per cent of GDP, government begins to take over functions and resources better left to the private sector, and economic growth slows,” they wrote.
The report cautioned that despite Canada’s mid-pack ranking in absolute terms for spending and debt levels within the G7 at the time, the rapid deterioration posed a risk. “Simply put, the study shows that Canada’s finances have deteriorated faster than any country in the G7 over the last decade,” the Fraser Institute concluded in its May 2024 commentary, warning that continued trends could erode Canada’s relative fiscal advantages. The G7 also includes France, Germany, Italy, Japan, the United Kingdom, and the United States.
As of May 2025, the data used in the May 2024 Fraser Institute study would have been based on IMF figures and projections available up to early 2024. More current data from the IMF has since been released.
