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With Finance Minister Bill Morneau set to table the next budget in March, Gagne believes now is the time for Ottawa to commit to rebalancing public finances. In his opinion, this could be achieved by limiting spending growth to inflation.

In an economic update last month, Morneau projected a deficit of $26.6 billion, some $7 billion more than forecast in the last budget.

And the next deficit is expected to swell to $28.1 billion for 2020-2021, before gradually decreasing to hit $11.6 billion in 2024-2025.

The Liberal government has justified its approach by emphasizing the fact that, despite spending that exceeds revenues, the debt-to-GDP ratio is expected to gradually decline to 29.1 per cent by 2024-2025 — the lowest since 2008-2009.

Nevertheless, according to forecasts from the economic update, the federal debt should reach $713 billion at the end of the current fiscal year and grow to $810 billion by 2024-2025.

Without being alarmist, Gagne says the current strategy implies that the federal government believes it can “indebt itself indefinitely.”

For the moment the impact is limited. Debt servicing represented just seven per cent of federal revenues in 2018, which is low compared to the mid-1990s, when this single item accounted for more than a third of government revenues, the study states.

But at some point, interest rates won’t be as low as they are today, according to the authors, who conclude that future generations will have to pay the bill.