Report

Fiscal Sustainability Report 2023

Jul 27, 2023

This report provides PBO’s assessment of the sustainability of government finances over the long term for the federal government, subnational governments and public pension plans.

Supplementary Data (xlsx)
Supplementary Data Sources
Supplementary Data (xlsx)
Supplementary Data
Supplementary Data (xlsx)
FSR 2023 Figures

Highlights

From the perspective of the total general government sector, that is federal and subnational governments and public pension plans combined, current fiscal policy in Canada is sustainable over the long term. Relative to the size of the Canadian economy, total general government net debt is projected to decline steadily over the long term due to fiscal room at the federal level and to rising net asset positions in the public pension plans.
Current fiscal policy at the federal level is sustainable over the long term. We estimate that the federal government could permanently increase spending or reduce taxes by 1.7 per cent of GDP ($49.5 billion in current dollars, growing in line with GDP thereafter) while maintaining fiscal sustainability.
For the subnational government sector, which includes provincial-territorial, local and Indigenous governments, current fiscal policy is sustainable over the long term. Under current policy, projected subnational government revenues and program spending are sufficient to keep the subnational government net debt-to-GDP ratio below its 2022 level over the 75-year projection horizon.
The current structure of the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) is sustainable over the long term. Under the current structure of the plans, projected contributions and benefits are sufficient to ensure that the net asset-to-GDP position is above its 2022 value after 75 years.