The federal debt, gross, is about $600 billion. So in Canada, with a population of about 33 million, that works out to $18,000. So my share, your share, your kid's share, is $18,000. What if the federal government let you pay off your share, right now? Then, for the rest of your life, you wouldn't have to pay the interest on your share of the federal debt. Let's say interest rates are 5%, so that's $900 less tax you would pay every year. In 20 years, your investment would pay for itself, and after that, it's gravy. Of course, unlike investing in RRSPs, you wouldn't get the principal back, but then again, you wouldn't pay tax on the interest saved, either. The federal government would be relieved of the headache of debt financing and repayment. Everyone wins.
To make this deal more attractive, I think parents should be allowed to pay off their children's debt. As long as their children are under 21, the tax rebate ($900) would go to the parents. But after that, the son or daughter could claim the amount on his or her own tax return.
I know, some people might object that only the rich could afford to do this. Not necessarily. If you think of it as an investment, $18,000 is less than the cost of a new car or the average down payment on a house. It could also be divided into more manageable amounts. For example, you could pay $9,000, and save $450/year, or $3,000, and save $270/year.
At the current rate of repayment ($3 billion/year) it will take 200 years to pay off our federal debt. This plan might let us pay it off a bit faster.