The C.D. Howe Institute says Ottawa has used aggressive assumptions to figure out what its pension assets and liabilities are.

Its analysis shows that if Ottawa were to valuate its assets and liabilities based on current market prices, the federal deficit would have been $7 billion higher last year.

The report says many of the budget surpluses Ottawa has recorded in recent years would have been deficits if the government had measured its pension obligations in a different way.

The conclusions could fuel the resentment some private-sector groups harbour toward the public sector, which is viewed as offering rich benefits at taxpayers' expense while companies struggle to get by, let alone pay out pension benefits.