In the months since the United States, Europe and Japan announced debt limits, countries across the globe have been grappling with how to meet the financial demands of growing populations.
The international debt crisis has created a growing number of debt issuers, who are turning to their existing financial institutions for assistance.
Credit crunch: How the debt crisis is hurting Canada’s economyAs a result, Canada’s global debt has surged to more than $4 trillion.
This year, the country has the largest total debt in the world, and Canada has the highest debt-to-GDP ratio.
With the global debt-fuelled debt-ceiling crisis, Canada has experienced the biggest increase in debt issuance in its history.
The country’s total debt rose from $1.1 trillion in January 2016 to $1,052 billion in June 2017.
That was the largest increase in Canadian debt ever.
With this increase in international debt, Canada now has the third highest total debt among all developed nations, behind the United Kingdom and France.
In Canada, debt issuance accounted for almost $2.3 trillion of total economic output in 2017.
But as the country grapples with a $1 trillion debt-financed bailout, debt issued by non-financial entities is expected to continue to increase.
The debt-driven boom in international borrowing has led to increased pressure on Canadian financial institutions, as a growing share of their lending capacity is being used to pay back debts.
This is the first in a three-part series examining how the debt-led global financial crisis has impacted Canada’s ability to repay its debts.