What share of Canada's federal revenue is consumed by interest payments in 2025?
Executive summary
Canada’s federal interest payments are projected to consume a materially larger share of federal revenue by the mid‑2020s: estimates in public reporting put federal debt‑servicing at roughly $53.8 billion for 2024/25 and World Bank/compiled data report interest payments equal to about 8.22% of revenue in 2024; some analyses and Budget projections say interest costs will rise to roughly 13% of federal revenues by the end of the decade (reported comparisons and projections: $53.8B federal interest in 2024/25 and 8.2171% in 2024) [1] [2] [3]. Available sources do not give a single explicit, authoritative figure labeled “share of Canada’s federal revenue consumed by interest payments in 2025” but the cited data let readers infer the scale of the burden [1] [2] [3].
1. Interest costs today: headline numbers and where they come from
Independent commentators and think‑tanks point to a large federal debt‑servicing bill: the Fraser Institute reports the federal government is projected to spend $53.8 billion on debt servicing in 2024/25, and that combined federal‑provincial interest payments reach $92.5 billion in 2024/25, giving a clear sense of magnitude even if not a precise revenue share for 2025 [1]. Separately, Trading Economics (drawing on World Bank data) reports interest payments equaled about 8.2171% of revenue in 2024—useful context for near‑term comparisons though not a direct 2025 government figure [2].
2. Why you won’t find a neat “2025 share” line in one source
Budget documents and fiscal monitors typically publish interest in dollars and provide projections of debt charges across several years rather than a single “percent of revenue in 2025” headline; Budget Annex tables discuss revenues and public debt charges in levels and trajectories but do not provide a single line in the materials in our set that states “X% of revenue in 2025” for federal interest [4]. The Fiscal Monitor and Department of Finance material report dollar changes, growth rates, and drivers (e.g., increases in interest on unmatured debt), but not the exact one‑number percentage for 2025 in the sources provided here [5] [6].
3. Short‑term indicators: what the budget and monitors say about trends
The government’s fiscal documents show public debt charges changing with borrowing needs and interest rates: the Department of Finance flags billions in additional interest on unmatured debt as a driver of higher planned spending, reflecting higher borrowing requirements and revised rates (e.g., cumulative increases noted in 2025–26 plans) [6]. The Fiscal Monitor notes public debt charges rose modestly in early 2025, driven mainly by the stock of marketable bonds [5]. Those dollar movements imply the share of revenue absorbed by interest will move with both debt charges and nominal revenue growth [5] [6].
4. Longer‑range projections and political framing
Commentary and media pieces draw stronger conclusions: one analysis cited in The Hub summarizes Budget 2025 projections and warns that by 2029 federal debt charges could consume “one in every eight dollars of revenue” (about 12.5%), and that debt interest costs rose from roughly 7.5% of revenues in 2015 to a forecast of about 13% by 2029—an explicitly political framing used to compare priorities such as health and child care spending [3]. Those claims rely on Budget forecasts and commentators’ calculations; they signal the narrative around fiscal pressures even if they extend beyond the specific 2025 year [3].
5. How to estimate “share of revenue” for 2025 from available data
To construct a 2025 share you need two published pieces: the federal public debt charges in dollars for 2024/25 or 2025/26 and the total federal revenues for the matching fiscal year. Our sources give the federal debt servicing projection ($53.8B for 2024/25) and a percent of revenue for interest in 2024 (8.2171%) but do not supply, in this bundle, a single authoritative “interest as % of federal revenue” for calendar year 2025; therefore any precise 2025 percentage would require pulling a revenue total from the Budget tables or Public Accounts and dividing the debt‑charges figure by that revenue figure—tables not included in the current set [1] [2] [4].
6. Competing perspectives and hidden agendas
Think‑tanks like the Fraser Institute present raw dollar and per‑capita comparisons that highlight the burden on taxpayers (they stress $53.8B federal interest and comparisons to transfers) and often use those figures to argue for spending restraint [1]. Media pieces citing Budget projections emphasize the political implications (e.g., comparing debt charges to health and child care transfers) and sometimes frame projections as a warning about future choices [3]. Government documents focus on drivers, scenarios and the role of nominal GDP and borrowing needs in shaping outcomes, and therefore present a more technical, less alarmist view [6] [4]. Readers should note each source’s implicit agenda: advocacy think‑tanks and some media stories aim to influence public debate; official documents aim to justify policy choices and present scenarios.
7. Bottom line and what’s missing
Available sources in this collection give clear evidence that federal interest costs are large and rising—$53.8 billion in 2024/25 and an 8.22% interest‑of‑revenue ratio in 2024 are established in the materials [1] [2]—but they do not provide a single, standalone figure explicitly labeled “share of Canada’s federal revenue consumed by interest payments in 2025.” To generate that exact 2025 percentage you must combine the government’s debt‑charges dollar estimate for the appropriate fiscal year with the matching total federal revenue number from Budget tables or Public Accounts, which are not included among the cited items here [4] [6].
If you want, I can calculate an explicit 2025 percentage for you from Budget or Public Accounts tables—provide the total federal revenue figure you prefer (fiscal 2024/25 or 2025/26) or permit me to extract it from a specific Budget/Public Accounts link.