“Canadian governments are doing some heavy lifting these days, directly supporting a still-vulnerable economy and essentially taking up slack left by cautious private sector participants,” it noted.
As a result, government budget deficits are growing, and borrowing needs are rising too, it said.
“Collectively, Canadian governments (federal, provincial, local) borrowed roughly $50 billion in Q3,” the report said — adding that government borrowing amounts to more than 6% of GDP on an annualized basis.
This abundance of new government debt is being supported by foreign investors once again, it also noted.
“Last year, [foreign investors] hoovered up [federal government] debt at an unprecedented pace, taking down…