- January 15, 2026
State of the Canadian Economy: Another Brick in the Debt Wall?
2025 Federal Budget Further Entrenches Structural Deficits
In this first event of GRI’s Macroeconomic Policy Webinar Series 2026, Warren Lovely from National Bank and Chris Ragan from McGill University examine whether Canada is quietly rebuilding a fiscal vulnerability last seen in the 1990s. Combined federal–provincial net debt now sits near 75% of GDP, after a COVID shock that added about 22 points and helped entrench structural federal deficits.
Debt remains marketable, but higher interest rates are pushing debt-service costs up rapidly, consuming scarce fiscal room. Canada’s apparent net‑debt advantage over G7 peers rests heavily on CPP/QPP and other financial assets, while gross public leverage resembles other more indebted jurisdictions. Meanwhile, Ottawa is leaning more aggressively on its balance sheet than most provinces, and governments collectively are borrowing roughly 7% of GDP net each year, with a growing dependence on foreign investors to absorb Canadian debt.
Speakers:
Christopher Ragan is an Associate Professor of Macroeconomics at McGill University’s Max Bell School of Public Policy, and was the school’s Founding Director. He was co-founder and Chair of Canada’s Ecofiscal Commission (which was awarded the 2015 Doug Purvis Memorial Prize for best work in Canadian economic policy for The Way Forward). From 2016-19, he was a member of the federal finance minister’s Advisory Council on Economic Growth. From 2010-13, he held the David Dodge Chair in Monetary Policy at the C.D. Howe Institute, and for many years was a member of the institute’s Monetary Policy Council.
During 2010-12, Chris was President of the Ottawa Economics Association. In 2009-10, he served as the Clifford Clark Visiting Economist at Finance Canada, and during the 2004-05 academic year, he was Special Advisor to the Governor of the Bank of Canada. From 1996 to 2000 he was Editor-in-Chief of World Economic Affairs.
Chris is co-author of the most widely used economics textbook in Canada. His 2004 book, co-edited with William Watson, is called Is the Debt War Over? In 2007 he published A Canadian Priorities Agenda, co-edited with Jeremy Leonard and France St-Hilaire from the Institute for Research on Public Policy. In 2007, Chris was the first economist to receive the Noel Fieldhouse teaching prize at McGill. In 2024, he was awarded the King Charles III Coronation Medal for contributions to Canadian policy. His writing appears frequently in The Globe and Mail.
Warren Lovely is a Managing Director with National Bank Financial, serving as Chief Rates and Public Sector Strategist within the firm’s highly regarded Economics and Strategy group. Warren joined NBF in 2015 from CIBC, where he had worked for 15 years in a variety of roles in economics, strategy and debt underwriting.
Warren had earlier worked for the Government of Canada in Ottawa, including at the Department of Finance. He holds a Master’s Degree in Economics from Queen’s University, a Bachelor of Arts in Economics from Wilfrid Laurier University, is a frequent commentator on financial markets in the media and regularly speaks to investors, business groups and governments in Canada and abroad.