This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, May 29, 2026
A potential sovereign debt crisis looms as governments continue to ramp up their spending and deficits. In 2024, the latest year for which data are available, global gross public debt hit 95 per cent of world GDP, 32 points higher than in 2001. The G7 countries, which make up 30 per cent of the world’s economy, are even worse, with gross public debt now at 124 per cent of GDP. And defence needs, demographic pressures and a desire to support the vulnerable will likely lead to even more debt.
It’s no surprise that 10-year treasury bond interest rates have returned to levels not seen since just before the 2008 financial crisis. The U.S. 10-year rate averaged 4.52 per cent in May, more than double its May 2019 average of 2.4 per cent. Borrowing charges are taking up a larger share of taxpayer dollars.
Canada is by no means immune from excessive borrowing. Our general government gross debt has reached 111 per cent of GDP, up from 67 per cent in 2001. We are fourth highest in the G7 and seventh highest amongst advanced economies — though at least we are less leveraged than the United States, where general government debt is 126 per cent of GDP.
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.
