Canada's aging population and other factors mean the country's finances are not sustainable over the long term, according to a report released Thursday by Parliament's budget watchdog.
Government debt can't grow faster than the economy in order for a country to be considered fiscally sustainable, and in his report, Kevin Page estimates the amount of fiscal action required to achieve sustainability.
He says that to fill the gap between debt and gross domestic product (GDP) and to restore sustainability to the public finances, it would require policy actions worth 2.7 per cent of Canada's GDP. To do this, the government either has to raise taxes, reduce overall program spending, or deliver a combination of the two.
Page's estimate of the fiscal gap would mean $46 billion worth of fiscal action this fiscal year alone, and that amount could increase over time in accordance with GDP.
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