Higher yields could add $11.2 billion to Ottawa’s interest costs by 2030

October 12th, 2026, 12:05PM

This year’s rise in bond yields could add approximately $11.2 billion to Ottawa’s annual interest bill by 2029–30 if higher borrowing rates persist, according to Desjardins Economics.

The analysis projects federal interest expense rising from $50.9 billion in 2025–26 to $62.1 billion in 2029–30, as older, lower-cost debt matures and is refinanced at higher rates.

The projections assume this year’s increase in bond yields is permanent, Ottawa maintains its current debt management strategy and deficits broadly follow Budget 2025 projections.

Despite the added expense, Desjardins said the increase, equivalent to approximately 0.3% of 2025 GDP by 2030, would not be large enough to significantly alter Canada’s fiscal outlook.

Source: Desjardins Economics

Visited 55 times, 55 visit(s) today

Last modified: October 12, 2026