Book Description

PBO is also able to compare PBO relative to GDP are determined by the size of the and Finance Canada assessments of the effect on operating balance (as a share of GDP) relative to long-term sustainability of recent changes to the the difference between the effective interest rate Canada Health Transfer (CHT), Old Age Security on debt and the rate of GDP growth (i.e., the (OAS), and direct program [...] Since both PBO and Finance Canada project similar interest Federal debt rate-growth differentials over the long term, Figure 3-1 compares PBO's projection of federal differences in the projected dynamics of the debt to the projection published by Finance Government's debt relative to the size of the Canada. [...] The differences between will be adjusted so that the "tax burden" (revenue the medium-term budgetary projections in the relative to GDP) is the same as is reached at the April 2012 EFO and Budget 2012 are small (Table end of the medium-term outlook when the 3-1). [...] Finance in its commitment in Budget 2007 that "sustainable Canada estimates that the largest contributor to public finances at all orders of government is a the change is the CHT escalator, which accounts for critical condition to achieving intergenerational 47 per cent of the difference in the federal debt equity and strong and sustained economic outlook in 2050-51. [...] PBO believes that fiscal transparency and spending restraint and changes to the OAS age of the ability of the Government to meet the eligibility account for 43 percent and 10 per cent, challenges of ageing demographics would be respectively, of the total change in federal debt to improved if parliamentarians encouraged Finance GDP ratio in 2050-51.