Referenced IMF data can be found here
Canada's increasing Debt-to-GDP ratio is a problem no one is talking about. While the country's gross government debt (which includes all levels of government) is large, it is rising faster than our ability to pay for it, and is returning to heights not seen since Canada's debt crisis of the early 90s.
When this Conservative government came into office our Debt-to-GDP ratio was 66.5%, the lowest it had been since 1985, since then it has risen to 85.4% in 2011. To put this in perspective in the early 90s when the Debt-to-GDP ratio was only slightly higher we were on the verge of what is now called a debt crisis.
Though many observers, the IMF and the Bank of Canada, forecast that growth in our GDP will slowly begin to outpace the growth in our debt, this is only after 2013 and does not include possible changes in government spending or tax reductions.
Some may maintain that a Debt-to-GDP ratio of 85.4% in 2011 and a forecasted 87.8% in 2013 is not a problem and that Canada's economy is doing just fine; Japan's economy after all is not in danger and its Debt-to-GDP ratio is 229%. However such observations neglect Canada's unique vulnerability to the world's worsening economy, particularly declining commodity prices.
Smaller economies cannot weather minor problems like larger economies can. Last year Spain was enjoying a Debt-to-GDP ratio of 69%, it was only this year that a banking crisis caused it to jump to 90%, and at that level the country will most likely require a bailout from the European Central Bank.
With Moody's, a credit agency, reviewing six major banks in Canada and worries of a balloon in the housing market, it would be more than prudent to consider our current high Debt-to-GDP ratio as a dangerous threat to our future economic stability. For it won't take much to cause the Canadian economy to severely suffer, be it commodity prices continuing to decline, Canadian personal debt levels increasing, our housing market crashing, or the world economy worsening.
There may be only way out of preventing disaster, but there are many ways to cause it. And with such a high debt level to GDP we are only drastically increasing the chances of the latter.
Cutting the GST and foregoing $14 billion in annual revenue while increasing government spending and growing our debt is a failure of this Conservative government to be financially responsible; and has made our country more vulnerable to crises.
Though Conservatives may defend their record by pointing out that we're not suffering right now, if anything goes wrong we will, and that's not how you run an economy, let alone a country.