Usually, Canadian Federal Gross-Debt History focuses on only the accumulated budget deficit. The expression extremely rarely focuses on the remaining 80 percent of government deficits, that is, on unfunded or unsecured liabilities. Take this example:
FRASER RESEARCH BULLETIN; April 2019
Examining Federal Debt in Canada by Prime Ministers Since Confederation, 2019
By Jake Fuss and Milagros Palacios
The following graph is from that article.
Commonly, Gross Debt is the sum of the accumulated budget deficit. That is allocated or borrowed money to pay for government expenditures. It can be identified portions of tax revenues or loans for which interest must be paid by current and future tax payers. That covers roughly 20% of government liabilities.
Unfunded Liabilities are the 80% portion of the accumulated government deficits not mentioned in the budgets. They are accumulated government liabilities for which no securities exist. No money has yet been borrowed to pay them back. They are liabilities that have not yet but will inexorably come due. They are, for example, future demands for payouts from government pension plans, medicare, social security, old age security and employment insurance, etc.
Unfunded Liabilities, a massive Ponzi Scheme
Unfunded Liabilities are moneys that will largely come due and and must be paid during the lives of our children, grandchildren and subsequent generations. Canadian governments’ unfunded liabilities are roughly equal to four times the current accumulated federal budget deficit. That is, 4 x $1.2 trillion or about $5 trillion, over and above the official accumulated federal budget deficit.
That makes the Canadian Unfunded Liabilities a massive Ponzi scheme. It is an elephant in the living room that no one wants to see. Federal and provincial politicians and bureaucrats, economist and journalists studiously avoid mentioning it. Perhaps many politicians and pundits may even be totally ignorant of unfunded liabilities.
Omitting Unfunded Liabilities from the Prospectus of a Corporation is a Criminal Offence
Directors of public corporations who fail to disclose the unfunded liabilities of the corporate entities in their charge are guilty of a serious criminal offence. It is a criminal offence for which – if discovered and prosecuted – they serve substantial prison terms.
For anyone not aware of the issue of unfunded liabilities, this undated Fraser Institute article explains:
A $243,000 bill courtesy of Canada’s governments
By Milagros Palacios and Hugh MacIntyre; Fraser Institute
(That is, $243,000 for every Canadian man, woman and child. — Walter)
“Imagine receiving a credit card bill that totaled $243,476. This would no doubt be a shock for most Canadians. But if you add up all the liabilities of every Canadian government–federal, provincial, and local–that is in fact how much each taxpayer would owe of the $4.1 trillion total in direct debt and unfunded liabilities.
This admittedly is a very large number and much bigger than what is usually talked about by both politicians and pundits alike. So let’s deconstruct it to gain a better understanding….” (Full text of article)