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The fiscal imbalance is back.

The Parliamentary Budget Office has just released a report on fiscal sustainability that questions whether public debt is likely to grow faster than the economy in the coming decades.

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The answer is re-assuring for federal governments. If all the PBO’s assumptions come to pass, there is no need for major corrective policy action and the federal net debt will be eliminated over the next 35 years.

This gives Ottawa the opportunity to increase spending or reduce taxes by up to 1.4 per cent of gross domestic product every year (about $28 billion next year) and still maintain net debt at current levels (34.1 per cent of GDP).

The Conservatives have committed themselves to reducing the debt and balancing the budget, but the PBO’s report suggests that the Liberals and NDP could conceivably argue there is room to stimulate the economy without raising long-term debt levels. It would, though, require them to run deficits and neither Tom Mulcair nor Justin Trudeau has yet dared to suggest they would breach the new balanced budget law.