Jake Fuss is director of fiscal studies and Grady Munro is a senior policy analyst at the Fraser Institute.Thanks to a series of floor crossings and three recent byelection victories, the Carney government now holds a majority of seats in the House of Commons, making it easier for the prime minister and his cabinet to pass legislation and set their agenda without having to strike deals with opposition parties. According to Prime Minister Mark Carney, "it's time to get serious” about governing the country. This makes it even more important for the government to chart a more responsible fiscal path forward rather than continue to mismanage federal finances.Indeed, despite promising a “very different approach” to federal finances compared to the Trudeau government, the Carney government has largely mirrored its predecessor. To quickly recap. During his tenure as prime minister, Justin Trudeau recorded the seven highest levels of per-person spending (adjusted for inflation) in Canadian history from 2018/19 to 2024/25 — that’s before, during, and after COVID. Due to out-of-control spending and despite promises to the contrary, the Trudeau government also recorded nine consecutive deficits and increased federal debt to the highest levels in Canadian history (after accounting for population changes and inflation). Meanwhile, compared to the Harper and Chrétien federal governments — which both kept a tighter rein on spending, balanced budgets, and either limited debt accumulation or reduced debt — the Trudeau government’s economic performance was dismal. For example, per-person GDP growth (an indicator of living standards) stagnated, and per-worker business investment (crucial for increasing worker incomes) declined under Trudeau. .Given the poor fiscal and economic performance of the Trudeau government, it was unsurprising to see Prime Minister Carney promise a different course. But in reality, the Carney government has yet to keep that promise. Rather than reduce spending, return to budget balance, and stop debt accumulation, the government doubled down with even more spending and borrowing in its first budget last fall. Specifically, from 2025/26 to 2029/30, the Carney government will spend a projected $67.6 billion more than the Trudeau government planned for the same five-year period. And due to weaker revenue projections, the government’s spending increases will produce budget deficits ranging between a projected $56.6 billion and $78.3 billion. For context, the Carney government’s cumulative deficits of $321.7 billion over five years are more than double what the Trudeau government had planned ($154.4 billion). And federal debt will now soar to a projected $2.9 trillion by the end of the decade, compared to $2.6 trillion under the Trudeau plan. Doubling down on the Trudeau fiscal strategy will likely produce similar dismal economic results for Canadians. It’s therefore critical that the Carney government, now armed with a majority, pivot away from its current fiscal plan and start fresh with a new plan that’s actually a “very different approach” from its predecessor. This will certainly require tough decisions, partially on the spending front, but delaying now will only necessitate even more difficult decisions in the future. Having gained a majority, the Carney government now has greater ability to shape federal finances uninhibited, which means it’s even more important for the government to choose the right fiscal path. The government’s fiscal update on April 28 will reveal just how “serious” a majority Carney government is about fixing the poor state of federal finances. Jake Fuss is director of fiscal studies and Grady Munro is a senior policy analyst at the Fraser Institute.
