Canada's National Debt
By the end of 1985, Canada's accumulated national debt will have risen to $225 billion and interest payments will be consuming one third of federal revenue. "No country in the world that has consistently followed this course has avoided a terribly painful day of reckoning. Canada will be no exception," wrote the editor of the Globe and Mail on December 9, 1985. Prime Minister Mulroney has stopped the deficit from growing, according to this editorial, but much more must be done to avoid disaster.
Rowland Frazee, chairman of the Royal Bank of Canada, observed: "The vast network of social and economic programs that we have grown so used to, so comfortable with, are cumulatively unaffordable . . . When government is spending almost 40 per cent more than it takes in, the conclusion is inescapable: we are doing things we cannot afford to do. We must stop." Frazee claims that Canada should aim for a deficit reduction of $5-billion to $7-billion over the next two or three years. "It can be achieved," he stated, "and it will not gut social programs or drive the economy into recession." Frazee believes business must help to convince the public of the serious nature of the situation, of the need for sacrifice and for support of federal efforts to cut spending. (Globe and Mail, November 29, 1985).