Frequently Asked Questions

We define unjust debt as debt that:

• was taken on unfairly or undemocratically, without the interests of the people in mind.
• has been or is used to enable wars or human rights abuses.
• has grown so large that it is undermining basic human rights, like health care and education, or preventing essential investments related to climate change.
• has become unsustainable, meaning it cannot reasonably be paid back based on the economic conditions of the debtor country.

While the Jubilee 2000 movement proved that debt really can be cancelled, the global economic system did not address the root causes of the debt crisis. In many cases, debt cancellation also came with strings attached, meaning countries needed to change their economies to appease creditors in order to qualify for cancellation. These conditions often created significant social and economic problems in their countries, like in Tanzania, where creditors demanded the country privatize its water infrastructure, resulting in mismanagement. Twenty-five years later, we have learned these lessons and want deep, lasting debt justice.

Today’s debt crisis is also rooted in the financial crisis of 2008. As borrowing rates fell in the Global North, creditors lent at high interest rates to countries in the Global South, looking to make more profit. The COVID-19 pandemic, inflation related to the war in Ukraine, and further inflation from rising interest rates around the world created a series of unexpected economic shocks, making it even harder for countries to pay back their debt. With no international way of canceling or restructuring debt, many countries are locked into the impossible choice of paying back creditors or investing in development and essential services, like health care and education.

In Laudato Si’, Pope Francis explains that “a true ‘ecological debt’ exists, particularly between the global north and south, connected to commercial imbalances with effects on the environment, and the disproportionate use of natural resources by certain countries over long periods of time.”

Canada has historically been a home for many extractive companies. Taking advantage of weak legal systems in countries in the Global South, many of these companies cause severe ecological destruction, along with introducing violence and health problems into local communities. Development and Peace ― Caritas Canada has highlighted many cases over the years.

One country where Canadian mining has had an outsized impact is Peru, where Canada has been identified as one of the top three investors in mines. One of those is the Constancia mine owned by Hudbay Minerals. Local people say it is contributing to increased violence and environmental degradation in the nearby community. You might recognize the company’s name from news headlines about a mine in Guatemala where several locals were killed, allegedly by security forces contracted by Hudbay Minerals. Members of that community have been trying to get justice in Canadian courts for over a decade. The company settled in 2024, though it did not admit to wrongdoing. Human rights groups have drawn attention to the similarity of abuses related to Hudbay Minerals mines in Peru and Guatemala. Hudbay is only one among many Canadian mining companies accused of abuses in the Global South, adding to Canada’s ecological debt.

Our ecological debt is also growing as a result of our contributions to climate change. Behind the United States, Canada emits more greenhouse gasses per capita than any other country among the top 10 emitters. Given its role in the fundamental inequalities and environmental harms caused by its production and consumption patterns, Canada owes an ecological debt to the Global South.

Pope Francis adds that “in different ways, developing countries, where the most important reserves of the biosphere are found, continue to fuel the development of richer countries at the cost of their own present and future. The land of the southern poor is rich and mostly unpolluted, yet access to ownership of goods and resources for meeting vital needs is inhibited by a system of commercial relations and ownership which is structurally perverse. The developed countries ought to help pay this debt by significantly limiting their consumption of non-renewable energy and by assisting poorer countries to support policies and programmes of sustainable development.”

As a result of its historical and ongoing colonialism, Canada also owes an ecological debt to Indigenous peoples across Turtle Island. By removing Indigenous peoples from the land and alienating them from their cultures, traditions, languages, communities and spiritualities, Canada, sadly with the participation of many Catholics, has suppressed those who have lived in dialogue with this land since time immemorial. Addressing this ecological debt must involve truth, justice and reconciliation with Indigenous peoples. As Pope Francis also reminds us in Laudato Si’, when Indigenous people “remain on their land, they themselves care for it best.”

Global debt is on the rise around the world. Many countries in the Global North also have more debt than ever before. However, not all national debt is treated in the same way, and debt in the Global North is generally not as threatening as debt in the Global South.

In the Global South, countries usually borrow in foreign currencies and must repay their loans in those currencies, meaning they need to have access to currencies that are not their own and that are expensive to obtain at high exchange rates. Interest rates on loans are also much higher for countries in the Global South, meaning the interest can compound much faster. Economies in the Global North are also considered to be more stable, making them more reliable in the eyes of creditors and allowing them to do more with their debt in ways that are not available for more unstable or precarious economies in the Global South. Countries in the Global South that are in a debt crisis also often owe considerable amounts to foreign creditors, whereas countries in the North, including Canada, often owe most of their debt domestically, making them less vulnerable to external interests.

While all countries must consider the impact of taking on debt, and how to make their debts work in the interest of citizens, a high amount of debt on its own doesn’t tell us very much. Structural factors make debt for countries in the Global South more burdensome.

The identities of private creditors are difficult to determine, creating a system where citizens and civil society organizations are unable to transparently examine the debt situation in a given country. Private creditors tend to be commercial banks, investment companies or hedge funds, and bondholders. One example is BlackRock, a US company that manages assets, which holds the debt of several countries in Africa. The company claims it cannot cancel the debt that it chose to lend because it has a fiduciary responsibility to its investors, which include people saving for retirement. Most people likely don’t know that their retirement savings are invested in debt that is preventing development across Africa, and they would probably choose not to pursue their own financial futures at the expense of the futures of others. True debt justice would involve real transparency, showing exactly who benefits from keeping populations in debt and giving people the power to discuss the conditions of their own futures.

Corruption exists in every society, and it is not only a problem in the Global South. But corruption is more likely and has greater impacts in countries with high rates of inequality. The debt crisis creates further inequality, often increasing corruption. Current lending and borrowing practices are not solving corruption. If we want to address corruption, canceling unjust debt is one piece of the puzzle.

Moreover, in many historical cases, creditors have lent money to corrupt regimes themselves, meaning the money that was already lent has facilitated corruption. In 2014, for example, the International Monetary Fund lent $189 million to the Honduran government under Juan Orlando Hernandez, who came to power by a coup, in exchange for privatizing key sectors of the economy. In 2024, Hernandez was sentenced to 45 years in prison by the U.S. government for drug related crimes. This debt was clearly not in the interest of the Honduran people, and it financed a corrupt government, but the debt was loaned by a legitimate lender. If debt that was loaned to corrupt governments was canceled, it might make creditors less willing to lend to corrupt regimes. Further, populations should not be forced to continue paying back loans that were taken out by corrupt leaders; the creditors should not have given the loan in the first place, and they should have to accept the consequences of making an unjust deal.

In short, no. Exploring their own paths of development, countries should be able to borrow at fair terms, in consultation with their people, and subject to being audited by citizens, not only creditors. Although today’s debt system makes debt very dangerous for the countries that need it most, borrowing should be one tool among many for countries to use in their development. Used appropriately, loans can be a way for countries to invest in their real development. If they are borrowed on just terms, they can be repaid sustainably and even encourage further financial cooperation. Without a fair international financing system, countries like Ecuador and Bolivia have experimented with constitutional laws that recognize the uses of taking on debt but make borrowing a last resort, noting that debt can become oppressive.

However, to redress the historic inequalities created by colonialism and a global economic system that drains much of the wealth out of the Global South into the Global North, foreign financing for development ought to be primarily in the form of grants. The global economic system must be transformed into a one that works for all. In the present economic system that extracts value and resources from Global South countries and leaves them without access to financial means, loans are yet another tool to extract even more value from the Global South in the form of interest payments.

“G7” means “Group of Seven.” It is made up of representatives from Canada, France, Germany, Italy, the United Kingdom, Japan and the United States. The European Union is also represented. The countries represent an informal group of so-called “advanced economies” in the International Monetary Fund (IMF), a multilateral financial institution. The IMF has a history of lending money at high rates to countries in the Global South, with the conditions that those countries must privatize their economies in the interests of profits rather than the public and common good. This policy that has trapped many countries in decades of economic dependency and unsustainable debt. As a member of the G7, Canada has a unique seat at the table to advocate for more just policies and international economic solidarity.

From June 15-17, 2025 Canada will host a meeting of the G7 in Kananaskis, Alberta, where it can dialogue with peer nations about the need for a more equitable debt system, one that works for people and the planet rather than profit.

Today, 3.3 billion people live in countries that spend more on paying interest than on either health care or education. Debt payments also hold back necessary funding for adaptation and mitigation measures related to climate change. Creditors often pressure countries to privatize key sectors of their economies, like infrastructure or services. Public sector jobs tend to employ more women, meaning cuts like these disproportionately affect them. Governments also might promote austerity measures thinking they will help raise revenue to pay their loans. This can involve refusing to spend money on public goods or projects, meaning people continue to lack investments in things like roads, electricity, and public services. For countries in significant debt crisis, the more money goes into the pockets of creditors, the less money goes into improving the lives of average people.

While responsible economic relationships require mutual responsibility and trust, creditors also take on a risk in providing loans to debtors. Creditors give loans to debtors with the hope and expectation of being paid back, plus a profit through interest. But there is nothing that guarantees that their investment is wise or sound, meaning they might have to accept a loss.

Reasons for being unable to pay a debt—whether as a nation, a person, or collective entity—are rarely as simple as being irresponsible, although being irresponsible is not a very good reason to keep a person or a whole country of people in debt forever, either. In the case of a country, climate shocks, natural disasters, war or unforeseen events are not adequately accounted for when creditors lend. Moreover, in an increasingly uncertain world, significant and unexpected events also prompt poor countries to turn to more external financing. During the COVID-19 pandemic for example, the economies of countries in the Global South slowed down, and their debts increased significantly. Both the conditions for taking on a loan and the conditions for paying it are subject to complex and changing circumstances that are often out of the debtor’s control. Creditors know this risk when they give out a loan, though in our global system, they do not have to deal with the consequences.

In addition to these challenges, not all debts are the same. In 2020, for example, the IMF provided a $346 million loan to Bolivia’s unelected interim government, which came to power by means widely considered a coup and preserved by repression. Following later elections in 2020 that ousted the interim government, Bolivia’s new government returned the loan, noting it would have undermined the country’s national sovereignty. The move was welcomed by debt justice advocates in Latin America. Creditors do not always take democratic legitimacy or human rights records as important information when choosing to give out a loan, and creditors should not be rewarded through payments from populations who are in debt because of the bad judgment of creditors. See our section What makes a debt unjust? for other criteria.

Of course, governments everywhere can and do mismanage funds, fail to invest in public projects that benefit the people, and lose money to corruption. But when countries are compelled to pay back their debt rather than invest in public services and goods, or to take on more of it under challenging terms for essential short-term needs, it is the people who pay the price, especially the poorest among them.

The global Jubilee campaign is calling for three major steps: cancel the debt, tackle the root causes of debt crises and establish a framework on debt at the United Nations. In addition to multilateral debt practices and creditors, a significant amount of global debt is also governed by laws in the State of New York and the United Kingdom, where our partners are advocating for legal changes. In the short term, lenders can afford to release their debts, while creditors cannot afford to keep paying them. While we hope that world leaders will create a stronger system that guarantees fair economic relationships, there is nothing preventing creditors from providing debt relief themselves without such a system. Learn more at our campaign resources page and sign the petition today.