To your point on interest rates, we had the former governor of the Bank Canada and the PBO, Mr. Giroux, here, and both of them said the same thing you did, that interest rates will inevitably go up. I kind of have a feeling that people have their head in the sand about this. I remember very well the 1980s and the 1990s, and Paul Martin's budget when interest rates were 7%. That was a reaction. It certainly would be better to have some rules so that we could plan ahead as opposed to cutting transfer payments the way Mr. Martin did.
That said, just to put some math to this idea of interest rates going up, right now the bank rate is about 0.25%. I noticed, by the way, when I was looking at your article in the Financial Post, that there was also an article about “stagflation”, that word from the 1980s. That's a possibility as well.
If interest rates go up 1% on $1 trillion, based on the short-term rollover you mentioned earlier, how long do you think it would take for the carrying costs of the debt to rise, say, 1% or 2% in interest rates? How long would it take for that to be reflected in government expenditures?