With an expected reduction in deficits from the very high levels of the pandemic, what we anticipate is a substantial reduction in the deficit going forward, to about 0.3% of GDP in 2026, if I'm not mistaken. If that materializes, that would put the debt-to-GDP ratio on a downward trajectory, which would be key in restoring Canadian long-term sustainability, at least at the federal level.
However, as I mentioned before, that doesn't take into account potential additional investments or spending items when it comes to platform commitments of the 2021 election campaign, or calls for Canada to increase its defence spending or health care transfers to the provinces. However, that doesn't mean that if the government were to fulfill all these commitments and respond favourably to these pressures, it could not reach its debt-to-GDP targets or achieve the reduced level of deficit; it would just mean that it would require additional revenues and increased taxes.
All that is to say that we are on a relatively good track as a country, when we look at the federal level, for a reduction in the deficit and a reduction of the burden of the debt as a share of the economy, but that depends a lot on what will be done in the future to respond to pressures that the government is faced with.