Achieving fiscal sustainability

Co-authored by David Dodge and Richard Dion in collaboration with Robert Asselin, the latest joint report by Bennett Jones and the Business Council of Canada demonstrates how the government’s current fiscal plan may not tell Canadians the full story about the sustainability of the country’s fiscal path. There has been extensive coverage of the joint report and a media briefing with David Dodge and Robert Asselin.

“We think that’s pretty unrealistic to think they’re going to achieve the goals of the budget with declining real spending per capita. That doesn’t align with what the government has said it wants to achieve.”

David Dodge, Senior Advisor, Bennett Jones LLP

“If anything, even more spending and borrowing may be required for the government to deliver on the policy objectives.”

“You’ve got to align what you’re promising with what you’re actually putting real resources behind.”

“Clearly, the ballooned levels of debt and deficits in (fiscal year) 2021-22 that resulted mainly from spending increases in 2020 are unlikely to be sustainable.” 

David Dodge, Senior Advisor, Bennett Jones LLP

 “There is a significant risk that both the debt ratio and the interest cost ratios exceed comfortable levels over the remainder of this decade.”

“A common assumption about deficits is that as long as interest rates … stay lower than GDP growth, the debt-to-GDP ratio won’t get out of control, and overall debt will continue to be manageable.”