Budget Watchdog Says Ottawa Has Fiscal Room to Reduce Taxes or Increase Spending

Parliamentary Budget Officer Yves Giroux prepares to appear before a committee in Ottawa, on June 13, 2022. The Canadian Press/Justin Tang

The federal government can afford to increase spending or cut taxes by 1.5 percent of gross domestic product (GDP) annually for the next 74 years and still maintain fiscal sustainability, according to a report from the Parliamentary Budget Officer (PBO).

In current dollars, that would mean Ottawa could increase or decrease spending by $46 billion while also stabilizing the net debt over the long term, PBO Yves Giroux said in his 2024 fiscal sustainability report.