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Interactive Tool
Where Does Your Tax Money Go?
Enter your income and see exactly how Ottawa spends every dollar you send them — and why debt interest now costs more than healthcare transfers.
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Interactive Tool
Enter your income and see exactly how Ottawa spends every dollar you send them — and why debt interest now costs more than healthcare transfers.
Your income
Your income
$65,000
Federal tax paid
$7,897
Effective fed. rate
12.1%
Your dollars at work
Based on how Ottawa spent every dollar in FY 2024–25
15.5% of spending
12.5% of spending
11.4% of spending
10.7% of spending
7% of spending
5.6% of spending
5.5% of spending
4.9% of spending
4.7% of spending
3.3% of spending
19% of spending
Note: Federal revenue (~$475B) is less than total spending (~$500B). The ~$51B gap is financed by new borrowing added to the national debt. Your tax share is based on your proportion of total federal revenue.
The debt interest problem
Public Debt Charges
$57B
FY 2024–25 (11.4% of spending)
Canada Health Transfer
$53.5B
FY 2024–25 (10.7% of spending)
Of your $7,897 in federal tax, this much goes to pure debt interest:
$948
That money produces zero services — it's the cost of past borrowing.
Debt interest has doubled in 3 years
At current trajectory, debt charges become the #1 federal expenditure within 5–7 years, overtaking elderly benefits.
Debt trajectory
Federal deficit, accumulated debt, and debt-to-GDP ratio — actual and projected
| Fiscal Year | Deficit | Fed. Debt | Debt / GDP |
|---|---|---|---|
| 2023–24(actual) | $40B | $1.20T | 42% |
| 2024–25(actual) | $51B | $1.27T | 43% |
| 2025–26(proj.) | $40B | $1.31T | 42.5% |
| 2026–27(proj.) | $30B | $1.35T | 41.5% |
| 2027–28(proj.) | $25B | $1.38T | 41% |
Even under optimistic government projections, federal debt exceeds $1.375 trillion by 2027–28. GDP growth assumptions of 4–5%/year nominal underpin improving ratios.
Rate sensitivity
Every 1% rise in rates adds approximately $12–13B to annual debt servicing costs. Toggle scenarios to see the impact on your personal share.
Annual debt servicing cost
$57.0B
Your personal share
$948
of your $7,897 in tax
Context: Canada's average effective interest rate on debt is approximately 3.0–3.5%. A return to 2022-era rates (5%+) would add $25–30B annually. About 30% of federal debt refinances each year, meaning rate increases phase in over 3–4 years.
Global context
Canada is better than Japan and Italy — but worse than Germany and Australia. The question is: which direction are we trending?
Net debt-to-GDP (IMF definition). Canada's ratio has risen ~10 percentage points since 2019. While absolute level is moderate, the rate of increase is among the fastest in the G7.
Where spending exploded
Federal employees: +40% in a decade
257,000
2015
360,000
2024 (current)
Federal headcount grew +40% while Canada's population grew just +12%. Productivity per employee has not kept pace.
Professional services contracts: doubled
~$10B
2015
~$20B
2023–24
Ottawa paid ~$20B to outside consultants in 2023–24 — while simultaneously hiring 100,000 more public servants. A department can't get its own work done and outsources it anyway.
ArriveCAN: A $54M app that should have cost $54K
1,000×
The Auditor General found the ArriveCAN app cost approximately $54 million — a simple mobile form that private developers estimated at $54,000. A 1,000× cost overrun, with no clear accountability.
Of your $7,897 in federal tax, approximately $1,039 goes to public service compensation alone — not including consulting contracts.
The path forward
A credible fiscal plan — spending restraint, better procurement, targeted cuts — could transform Canada's finances within a decade.
| Timeframe | Annual Deficit | Debt / GDP | Interest / Revenue |
|---|---|---|---|
| Current | $51B | 43% | 11.5% |
| Year 3 | $22B | 40.5% | 10.5% |
| Year 5 | $12B | 38% | 8.5% |
| Year 10 | Balanced ✓ | 33.5% | 6.5% |
What this requires:
Return federal headcount to ~300K (from 360K) through attrition — no hiring freeze, just slowing replacement
Cut professional services spending by 30% ($6B/year) through better internal capacity and procurement reform
Streamline project approvals — implement the productivity gains that come from faster infrastructure delivery
Indexing program spending to inflation, not to political priorities — letting nominal growth compress the debt ratio over time
Share this
“On a $65,000 salary, I pay $7,897 in federal tax. $948 of that goes to pure debt interest — more than healthcare.”
onthinice.ca/tools/fiscal
Sources: Parliamentary Budget Officer (PBO) Economic and Fiscal Outlook, Fall 2024; Department of Finance Canada, Budget 2024 and Fall Economic Statement 2024; Office of the Auditor General of Canada (ArriveCAN report, 2024); Treasury Board of Canada Secretariat, Public Service Employment Statistics; IMF Fiscal Monitor, October 2024 (net debt-to-GDP comparisons); Canada Health Act annual reports (CIHI). Federal tax calculations use 2024 bracket rates and the basic personal amount credit (~$15,705). All figures are approximate estimates for FY 2024–25 unless noted. Interest rate sensitivity assumes linear relationship with debt refinancing at approximately 30% of stock per year.