Canadian Wealthy Tax Leaves Big Debt Risks As Is

Prime Minister Justin Trudeau's new government is preparing to impose higher taxes on Canadians, which will help fund some campaign promises, but is not broad enough to also begin to pay off record levels of debt in the country, leaving Canada vulnerable to the next economic crisis.

This strategy could be risky for a country that has accumulated new debt at a faster rate than any of its peers in the G7 during the pandemic, and the high level of indebtedness could limit Canada's ability to manage long-term challenges that require massive government funding, such as the transition from a fuel-dependent economy. Fossil to green economy. Kelly Bessette Tom, director of sovereign ratings for the Americas at credit rating agency Fitch, said Canada's huge debt burden "doesn't leave much fiscal space to offset major new shocks."