EDITORIAL: Feds rolling in cash, even if you aren’t

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The message of Prime Minister Mark Carney’s spring economic update — aka the mini-budget — is that the federal government is doing just fine, even if you aren’t.

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The feds are predicting a revenue bonus of $36 billion — an average of $7.2 billion each year over five years — driven by higher personal and corporate income tax revenues paid by all of us, in part due to higher oil prices.

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But they plan to spend more than that — $37.5 billion over six years — in what the Liberals describe as enhanced affordability measures for Canadians.

Those measures will leave some Canadians marginally better off but what the mini-budget failed to do is to address Canada’s long-term debt problem.

Don’t be fooled by the Liberals’ headline claim that they have lowered the annual federal deficit from $78.3 billion in their November, 2025 budget to $66.9 billion in Tuesday’s mini-budget for the 2025-26 fiscal year.

Overestimating deficits at the start of the fiscal year in order to look like financial geniuses at the end of it is the oldest trick in the book. The Jean Chretien/Paul Martin Liberals used to do it all the time.

The real story is that from now until 2030, Carney and Co. are projecting virtually the same annual deficits as they did in their November budget.

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That will add a projected $295.5 billion to Canada’s total public debt which this year will increase to $1.4 trillion, rising to a projected $1.63 trillion in 2030 when government assets are added in.

This year, taxpayers will pay $58.7 billion in interest on the federal debt.

That would more than pay for the $57.4 billion the federal government will transfer to the provinces for health care this year, except paying interest on debt doesn’t even lower the debt.

There’s no plan to balance the federal budget.

The economic update says the government will fulfill Carney’s commitment to balance the federal operating budget (the government’s day-to-day expenditures) by the 2028-29 fiscal year.

But according to the parliamentary budget office, that’s only because the government improperly reclassified $94 billion of operating expenditures — 30% of planned spending — as capital investments in its November, 2025 budget.

Properly accounted for, the PBO said, Carney won’t balance the operating budget, as he promised, by 2028-29.

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