Accumulating debt poses a problem for the Canadian federal government because

Question

Quizplus · Accepted Answer

A large debt-to-GDP ratio causes crowding out, which means that the government may have to pay higher interest rates on its debt, which reduces the amount of money available for other government expenditures like education or healthcare. This can lead to lower overall economic growth and reduced standards of living for Canadians. Additionally, if the debt gets too large, investors may become hesitant to lend money to the government, which could lead to defaulting on the debt.

Accumulating Debt Poses a Problem for the Canadian Federal Government