The Parliamentary Budget Officer has delivered a damning critique of Prime Minister Mark Carney’s Budget 2025, calling out Ottawa’s “overly expansive” definition of capital spending and warning that the government’s promise to balance the operating budget is not credible.The Canadian Taxpayers Federation immediately seized on the report, urging Carney to cut spending and curb borrowing. “The reality is that Carney is continuing on a course of unaffordable borrowing and the PBO report shows government messaging about ‘balancing the operating budget’ is not credible,” said CTF Federal Director Franco Terrazzano.“Carney is using creative accounting to hide the spiralling debt.”Budget 2025 separates operating and capital spending, promising to balance the operating budget by 2028-29. But the PBO report shows that without the government’s broad definition of capital spending, Ottawa would face an $18 billion operating deficit in 2028-29. .According to the PBO, actual capital investments would total $217.3 billion over 2024-25 to 2029-30 — roughly 30% ($94 billion) less than Carney claims. Under the PBO’s framework, the operating balance would remain in deficit throughout that period.The report also blasts the government for including corporate income tax expenditures, investment tax credits, and operating subsidies under “capital investment,” blending policy measures with capital formation in a way that departs from both Public Accounts standards and international practice.Carney’s government plans to borrow about $80 billion this year. Interest on that debt alone will cost taxpayers $55.6 billion — more than the federal health transfers to provinces ($54.7 billion) or revenue from the GST ($54.4 billion)..“Carney isn’t balancing anything when he borrows tens of billions of dollars every year,” Terrazzano said. “Instead of applying creative accounting to the budget numbers, Carney needs to cut spending and debt.”The PBO report leaves little doubt: Ottawa’s operating surplus is more fiction than reality, and Canadians can expect years of continued borrowing if current practices continue.
