Canada will spend more than $1 billion every week servicing its national debt, according to figures in Ottawa’s 2025-26 federal budget.
The Department of Finance projects public debt charges — interest payments on the federal debt — at $55.6 billion for the fiscal year (55.6 ÷ 52 ≈ $1.07 billion per week, or ≈ $152 million per day).
The annual figure for the Canada Health Transfer — the main federal transfer to provinces and territories for publicly-insured health care — is approximately $49.4 billion
At the same time, the government forecasts a $78.3 billion deficit, about 2.5 per cent of GDP, reflecting persistent program spending, infrastructure commitments, and higher borrowing costs. The debt-servicing bill is among Ottawa’s largest single expenditures and now rivals the size of major transfer programs.
Economists warn that rising interest charges could erode fiscal flexibility as the federal debt climbs to an estimated $1.34 trillion. Even small increases in bond yields could add billions to future budgets.
Finance officials maintain the fiscal path remains sustainable, pledging to reduce the debt-to-GDP ratio over the medium term. Analysts, however, caution that sustained deficits leave Ottawa vulnerable if economic growth weakens or interest rates rise again.
