OTTAWA, ON: The Canadian Taxpayers Federation is calling on Prime Minister Mark Carney to cut spending following today’s bombshell Parliamentary Budget Officer report that criticizes the government’s definition of capital spending and promise to balance the operating budget. 

“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 Franco Terrazzano, CTF Federal Director. “Carney is using creative accounting to hide the spiralling debt.”

Carney’s Budget 2025 splits the budget into operating and capital spending and promises to balance the operating budget by 2028-29.

However, today’s PBO budget report states that Carney’s definition of capital spending is “overly expansive.” Without using that “overly expansive” definition of capital spending, the government would run an $18 billion operating deficit in 2028-29, according to the PBO.

“Based on our definition, capital investments would total $217.3 billion over 2024-25 to 2029-30, which is approximately 30 per cent ($94 billion) lower compared to Budget 2025,” according to the PBO. “Moreover, based on our definition, the operating balance in Budget 2025 would remain in a deficit position over 2024-25 to 2029-30.”

The PBO states that the Carney government is using “a definition of capital investment that expands beyond the current treatment in the Public Accounts and international practice.” The report specifically points out that “by including corporate income tax expenditures, investment tax credits and operating (production) subsidies, the framework blends policy measures with capital formation.”

The federal government plans to borrow about $80 billion this year, according to Budget 2025. Carney has no plan stop borrowing money and balance the budget. Debt interest charges will cost taxpayers $55.6 billion this year, which is more than the federal government will send to the provinces in health transfers ($54.7 billion) or collect through 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.”