QUESTION PERIOD — Finance
Fiscal Anchors
May 5, 2026
Announcements aren’t expenditures.
Senator Moreau, one of the reports released by the Parliamentary Budget Officer this week underscores that fiscal sustainability is grounded in our debt-to-GDP ratio, not our deficit-to-GDP ratio. This matters because the deficit-to-GDP ratio can decline even while our debt-to-GDP ratio rises if interest rates rise or GDP growth weakens. Why has the government chosen to use the deficit-to-GDP ratio as a fiscal anchor when it does not accurately indicate whether our finances are actually sustainable?
The government was already acting from a strong fiscal position. Canada has the lowest net debt-to-GDP ratio in the G7. Canada has the second-lowest deficit-to-GDP ratio in the G7 and the strongest credit rating, AAA, from Standard & Poor’s and Moody’s. I think only Germany has a similar score. The government has clear fiscal anchors, a declining deficit-to-GDP ratio and a commitment to balancing the operating budget by the fiscal year 2028-29, which will be achieved by driving investment into Canada and finding long-term savings, modernizing and improving efficiency.
I’m sure Canadians are comforted by that. Senator Moreau, would you not agree that using the deficit‑to-GDP ratio as a fiscal anchor is misleading to Canadians, since it can improve even while our debt-to-GDP ratio worsens?
I do not agree.
