The federal government fiscal situation is in good shape, but when you look at federal plus provincial finances, you can see that the country as a whole is running larger government deficits. I think the federal government can run deficits for a few years. I don't really care when we return to balance, whether it's three years from now, or four years from now, or five years from now, but ultimately, sound fiscal policy is to return to balance.
I don't like the discussion being weighted on keeping the debt-to-GDP ratio low, because I also know there will be economic cycles, and governments cannot smooth out the business cycle. We will at some point have another recession. When we have a recession, the debt-to-GDP ratio will jump because the denominator has contracted, and that is beyond the control of policy-makers. At the same time that we have the next downturn, there will be a lot of pressure to provide fiscal stimulus to help the economy get out of the recession, which would be a perfectly reasonable fiscal policy response to a downturn, but that again would make the debt-to-GDP ratio higher.
As a result, I don't feel that it is a fiscal anchor. I think the prudent fiscal policy is a commitment to ultimately return to balance, but it really isn't a matter of one year, two years, or three years. It's a matter of setting a course and then navigating along it.