Pandemic Response / Risk Management Practices
Primer on Gross Debt/GDP Risk
in the Shadow of COVID-19:
Canada Joins Top Debtor Nations
Lois Tullo, Executive in Residence, Global Risk Institute
The immediacy of the COVID-19 pandemic pressed governments globally to increase fiscal spending to levels not witnessed since WWII.
As the gross debt/GDP ratio grows, Canada faces the risk of increased interest coverage payments leading to reduced future fiscal flexibility. An acknowledgement of this increased risk must be met with an understanding of a plan to build the economy and to pay down the deficit. This raises a number of issues that need to be debated to address the risks coming in the future.
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