Fact check: Which Canadian provinces have the highest debt to GDP ratios in 2025?

1. What different claims are being made about provincial debt rankings—and why they clash

Two distinct claim sets appear: one ranks provinces by combined federal‑plus‑provincial debt‑to‑GDP, placing Newfoundland & Labrador at the top and Alberta at the bottom; the other focuses on changes in provincial net debt‑to‑GDP over the 2025–2028 horizon, singling out British Columbia, Nova Scotia, and Prince Edward Island for the largest projected increases ^{[1] [2] [3]}. The tension arises because one metric aggregates federal liabilities with provincial ones, which heavily weights provinces with large federal transfers or smaller GDP bases, while the other isolates provincial net debt trends, highlighting provinces experiencing faster deterioration in fiscal positions. Both are valid but answer different policy questions ^{[1] [3]}.

2. Why Newfoundland & Labrador shows up as worst when federal debt is combined

The headline figure that Newfoundland & Labrador has an 88.4% combined debt‑to‑GDP ratio uses a combined federal‑provincial framing that inflates debt burdens for provinces with small GDP denominators or large per‑capita transfer flows; this method can make Atlantic provinces appear more indebted in relative terms than they would under a provincial‑only measure ^[1]. The analysis that produces this ranking explicitly aggregates federal obligations with provincial ones, meaning it reflects the total public debt exposure faced by residents rather than the fiscal capacity or policy choices of the provincial government alone ^[1].

3. Why Alberta appears as the lowest under the combined metric

Alberta’s position as the lowest combined debt‑to‑GDP (40.8%) reflects its relatively large provincial GDP and lower net debt levels compared with other provinces; when federal liabilities are added proportionally, a large provincial GDP acts as a bigger denominator, reducing the ratio ^[1]. This outcome underscores that rankings can be driven more by economic scale and revenue performance than by absolute debt dollars. In short, Alberta’s stronger GDP base and past fiscal performance give it favorable placement under combined metrics, even if provincial policies change ^[1].

4. Provincial net‑debt trends show different winners and losers

Separate provincial budget projections emphasize increasing provincial net debt as a share of GDP for British Columbia, Nova Scotia, and Prince Edward Island, with aggregate provincial net debt rising from 29.6% in FY25 to 33.2% by FY28 ^{[3] [2]}. That projection focuses on provincial fiscal trajectories rather than cross‑province ranking at a single date. It highlights where provincial policy choices, demographic pressures, or revenue shocks are expected to produce the fastest deterioration in debt metrics, even if those provinces don’t top combined‑debt lists at a snapshot in time ^[3].

5. Reconciling the two approaches: framing matters for policy

Both approaches provide useful but different lenses: the combined federal–provincial measure captures total public sector exposure relevant for national risk assessments, while the provincial net‑debt trajectory reveals which provincial governments face the steepest fiscal deterioration and near‑term policy pressure ^{[1] [3]}. Policymakers and analysts must decide whether they care more about household‑facing total public obligations or the budgetary choices and solvency risks that provincial governments must manage directly. The analyses explicitly note these methodological differences and their implications for interpretation ^{[1] [3]}.

6. What’s omitted or uncertain in the available material

The documents do not provide a full province‑by‑province table with consistent definitions and a single reference date to allow straightforward ranking under one standard approach; one source notes that fiscal tables exist to compute debt‑to‑GDP but do not publish a direct ranking ^[4]. The projections also depend on macro assumptions—growth, interest rates, and federal transfers—that can materially change outcomes by FY28. These caveats mean the headline rankings are sensitive to methodology and underlying economic assumptions, a point emphasized by the different presentation styles in the materials ^{[4] [5]}.

7. Bottom line for the original question and how to use these findings

If the question asks which provinces have the highest debt‑to‑GDP in 2025 under a combined federal–provincial view, the answer is Newfoundland & Labrador highest, Alberta lowest ^[1]. If it asks which provinces are set to see the largest increases in provincial net debt‑to‑GDP from FY25 onward, the answer is British Columbia, Nova Scotia, and Prince Edward Island, with aggregate provincial net debt projected to rise to 33.2% by FY28 ^{[3] [2]}. Users should be explicit about which metric they mean; both measures are defensible, but they illuminate different policy questions ^{[1] [3]}.