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‘Certainly a drag on what the federal government can do’: economists split on usefulness of racking up debt for infrastructure spending

By Emily Haws      

Economists generally say Canada's doing OK when it comes to managing its debt servicing payments even if interest rates increase, but the Fraser Institute's Charles Lammam argues billions of dollars aren't providing direct benefit to Canadians.

Prime Minister Justin Trudeau, right, and Finance Minister Bill Morneau unveil the 2017 federal budget last March. The budget had a projected deficit of $28.5-billion, which will be added to the public debt. The Hill Times file photograph

The Liberal government has promised to increase the federal debt to invest in infrastructure it says will boost the economy, but economists are divided on whether the increased public debt, and the money spent to pay it off, is worth it. With an improved economy and interest rates expected to rise, the annual cost of paying off the debt will also climb—from the current amount of nearly $25-billion to almost $40-billion within the next five years. Canada’s federal

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