Honourable senators, please allow me to once again raise this important issue. My question is for the Leader of the Government in the Senate and it concerns keeping an effective control over our finances. Senator Gold, the Prime Minister stated on Monday that the government’s upcoming fiscal update won’t include a fiscal anchor to indicate to Canadians that the government has put in place a ceiling, or cap, on its public spending, deficit or debt level. However, numerous experts do agree there are many positives in doing so. To mention a few, it includes providing a measure of fiscal discipline inside government; ensuring that the government has the ability to respond to future economic shocks and unforeseen crises — the end of this crisis is nowhere in sight; retaining the confidence of lenders and global markets, which is also very important; and creating a positive investment climate for businesses that are all going through a very difficult time.

I appreciate we are in a pandemic, and more and more Canadians are relying on government intervention to make ends meet and to put food on the table. For many, the government’s various emergency response benefits have been a lifeline, and we should continue supporting Canadians where and when required. However, most Canadians also understand that we must operate within a budgetary framework. We don’t know how long this pandemic will last nor how quickly our economy will recover. We need to plan well and monitor our resources.

Senator Gold, as I mentioned to Minister Freeland during her last visit, many experts and Canadians would feel much more comfortable if the government would have a fiscal anchor and have an actual spending plan — a guide in place — despite the volatility of the situation. Here is a question and a challenge; I always like giving out challenges. Can you influence or encourage the government to include a fiscal anchor in its upcoming economic update in order to give us a sense of direction and to keep an effective control over our finances while continuing to support Canadians?

I thank Senator Gold for the response. I’m glad that we are considering the risks. At this point, there are two things — debt level and capacity to repay — and we are fortunate that interest rates are very low at this point in time.

We do have the capacity to repay. We started at a good point with our debt-to-GDP before the pandemic, so I’m confident that the problem is not in the capacity to repay. The capacity to repay and the cost of managing the federal debt at this point, because of the low interest rates, is unlikely to become a huge concern or liability in the short term.

The problem, though — and as senators, taking the longer view — is that as the economy recovers, interest rates rise and debt-servicing costs increase significantly. The risk is that we won’t be able to sustain this spending and the repayment of our debt becomes an issue because debt-servicing costs increase.

I do note that the Bank of Canada recently predicted that interest rates will stay at near-record lows until 2023, giving you an idea of the magnitude of this crisis. So we have to manage our resources well.

My question is this: Are you assessing the risk in the longer term? Are you acknowledging that risk? Is it a continuous government discussion? Because short term we’re not getting an anchor, are we looking at the longer-term effect? And how will we mitigate this risk longer term? Hopefully our economy recovers and our interest rates increase, and the debt servicing may create an issue.