By Staff
March 27th, 2025
BURLINGTON, ON
Kevin Page: head of the Institute of Fiscal Studies and Democracy at the University of Ottawa.
Kevin Page, former parliamentary budget officer and head of the Institute of Fiscal Studies and Democracy at the University of Ottawa, said in an interview this week that the economy will not collapse but Canada is likely to face a recession due to Trump’s tariff wars.
“The geopolitical uncertainties could have a worse impact,” he said.
“It’s not just that the stock markets get rattled. It’s also that people start to feel that it’s going to get worse. And then everybody slows down. Everybody stops spending.”
However, he said, the bigger picture of the government’s finances shows Ottawa can weather the storm ahead and is in a position to support the hardest hit sectors and workers.
“Our debt to GDP numbers are better than other countries, much, much better than the United States. So we could provide that kind of shock absorber if — depending on what happens — it can help Canadians. So in that sense, like, you know, we have some built-in resilience.”
I respectfully disagree with that analysis. The U.S. has a debt-to-market cap ratio of 40%, while Canada’s ratio is 50%, based solely on GDP. The U.S. possesses $269 trillion in assets, excluding gold (a Tier 1 liability). When we subtract $145 trillion in liabilities from this, it results in a net worth of $124 trillion. I am not trying to sound harsh, but the comparison is not valid. If Canada could effectively export its resources to global markets, the situation would be quite different. We should avoid giving people false hope.
I’m a bit confused David. You are using a comparison of U.S. debt-to-market-cap ratio (a stock market valuation comparator) to Canada’s ratio of debt to GDP (gross domestic product comparator). The comparators are two different animals, so how is this an apples to apples comparison? Just curious how it proves any point?
My other question is pure curiosity. The U.S. $269 trillion assets apparently exclude gold. I would think gold would be an asset valuable to have. But you say it is treated as a liability so it not just not included in the asset count, it actually penalizes the assets because it must be subtracted from them to yield just $124 trillion. This must be an accounting rule, but it seems irrational to me. Can you explain why holding gold is a bad thing for the U.S.? Because every country holds it their reserves, including Canada. Thank you.
I hope you have been equally critical of the Liberals’ somewhat cavalier use of the debt to GDP ratio. First of all, comparing the debt-to-GDP ratio to other countries, even limited to the G7, isn’t very accurate. Some of those countries are unitary states, not federal ones like Canada; to get an accurate comparison, we would have to add federal and provincial debt. Secondly, often used is “net debt to GDP”, again quite misleading because two of the assets used to calculate net debt are the surpluses in the CPP and EI funds which can’t be used as an offset against the debt.
Hi Gary,
I wanted to highlight something important: the incredible wealth disparity between the U.S. and Canada, as well as the rest of the world. If we look at the debt-to-GDP ratio, Canada could double its current debt and still fall below the U.S. ratio. However, this doesn’t mean they could actually afford such an increase.
I’ve been researching market capitalizations related to assets and liabilities, and I’m particularly interested in how India evaluates the true wealth of sovereign nations. From this perspective, the U.S. ranks first in market capitalization, boasting an equity basket of $76 trillion, after removing gold and currency exchange reserves. China comes in second with a market cap of $10 trillion.
Many of us are keen to understand the evolving landscape of monetary policy, especially regarding gold over the past year. Your last question reminded me that, on the balance sheets of financial institutions, fiat currencies are classified as liabilities because they represent promissory notes that could once have been exchanged for gold. This duality makes gold both an asset and a liability, which may explain the cautious approach taken in accounting.
Recently, gold has started being classified as a tier-one asset, although it still appears in the liability column on balance sheets. Gold traders have noted that central banks have been accumulating significant amounts of gold. There are also reports of a single buyer with substantial resources purchasing gold without regard for the upward pressure on prices, particularly from COMEX in the U.S. Additionally, a large amount of privately held gold has been transferred from the Bank of England to the U.S. With countries such as Indias repatriating their gold
Gold traders and economists on platforms like YouTube and various online forums are actively speculating about the identity of this buyer and the reasons behind their accumulation of gold, and exploring various theories in the comments sections and on X.
Blockchain technology is also being explored as a solution for asset authentication. Notably, Russia is the largest holder of gold, followed by the U.S., where gold is valued at around $3,000 per ounce on the market, but U.S.-held gold is recorded on the books at only $42 per ounce. In contrast, Canada no longer holds gold, having sold all of its reserves, but remains one of the largest producers of gold.
This situation might seem bewildering, but anyone who follows professional sports teams and analyzes players and stats can easily engage in this conversation. Although I know little about sports, the structure—organized into groups, teams, countries, and leagues—ensures order; without this structure, it would descend into chaos.
Similarly, in our economic landscape, we see the emergence of Trump and Project 2025. And a projection of three separate leagues: the U.S., China, and Russia, each comprising geographically grouped countries with a common domestic currency backed by gold. When these leagues interact, they will utilize a foreign exchange system supported by GDP. Each team within a league will adhere to a common set of rules while maintaining its individuality.
My latest thought on why will probably change tomorrow, but by all means join the conversation heres something to get you started **An Introduction to the Changes in Fiat Currency Value: Everyone is a Creditor**
https://dennis9ab.substack.com/p/everyones-a-creditor
I was talking to a friend last night about Mark Carney and his sudden appearance on the scene, Canada is not this man’s playground and his wife looks less than thrilled to be here, Europe and New York are more their style, we both agreed that they wouldn’t be here long, the question is what is he here for? We both agreed it was not to be Prime Minister of Canada, I opined that his particular narrowed skill that it must be a factoring of asset valuation in regard to disillusion. My friend looked uncomfortable at this suggestion.
Thank you David for taking the time and research involved in responding to my confusion and questions. You’ve given me a lot to review and think about. I really appreciate the explanations you have provided. Sharing information and opinions is what makes a democracy great and having a forum like the Gazette to aid us in this privilege is valuable in today’s world. Thank you again.
Hi Gary,
I look forward to any insights you may have based on your discoveries. If you’re ready for a challenge, please watch the attached video. By the time you decipher what Sree Iyer is saying about a recent occurrence involving China and its RMB, as well as the potential US response, you’ll likely become more knowledgeable than many experts you currently rely on for advice.
https://youtube.com/watchv=QAI86QQgRkg&si=OMZ3MWaSOCGrohop