Carney plans to outspend Trudeau by nearly $70 billion: study

Additionally, the Carney government projects total federal debt will reach $2.9 trillion to $266.4 billion more than the Trudeau government planned.

Author: Quinn Patrick

Prime Minister Mark Carney’s government is set to dramatically ramp up spending, planning to outspend the former Trudeau-Liberals by nearly $70 billion while doubling projected deficits, according to a new analysis from the Fraser Institute.

The non-partisan public policy think-tank compared the fiscal plans presented in the 2024 fall economic statement (the Trudeau government’s last fiscal release) and in Budget 2025. It calculated their respective spending, total deficits, debt accumulation and overall revenues.

“During the 2025 election, the Carney government promised to take a very different approach to federal finances than its predecessor, but based on his first budget, spending is higher and deficits are double than what even Trudeau planned to spend, which substantially worsens the state of federal finances,” said Jake Fuss, director of fiscal studies at the Fraser Institute and co-author of the study on Tuesday.

For example, between 2024/25 and the end of the decade, the Carney government plans to spend $47.8 billion more on program spending than the Trudeau government projected over the same five-year period.

“Crucially, the Carney government plans to run combined deficits of $321.7 billion from 2025/26 to 2029/30,” reads the study. “That is more than double what the Trudeau government had planned over the same period ($154.4 billion).”

Additionally, the Carney government projects total federal debt will reach $2.9 trillion—$266.4 billion more than the Trudeau government planned.

“Rather than take a new approach, the Carney government clearly plans to continue, and even exacerbate the same failed fiscal policies of his predecessor, which does not match the rhetoric Canadians heard on the campaign,” said Grady Munro, senior policy analyst at the Fraser Institute and co-author.

Meanwhile, former PBO Jason Jacques sounded the alarm on this spending spree months ago. He published a report tallying that interest charges on the debt alone would cost taxpayers more than $55 billion in 2024–25.

That is more than the federal government transfers to provinces annually for health care.

By 2030, debt interest charges are projected to cost Canadians $82.4 billion.

“The federal debt-to-GDP ratio is projected to increase from 41.7 per cent in 2024-25, rising above 43 per cent over the medium term,” reads the report.

Before Jacques’ term had expired earlier this month, the ex-PBO warned that the government’s “very broad” definition of “capital” for investment and spending was unique to Canada and not recognized by any other economy in the world.

“We are unaware of any advanced jurisdictions that would define capital in that way,” he said in January.

“There are other measures as well, including operating subsidies provided to companies that are potentially related to capital investments that the Government of Canada also includes that is not really seen in other jurisdictions,” Jaques said. “In reading through the report and the commentary from the International Monetary Fund, it’s evident that the International Monetary Fund also shares those concerns.”

The Fraser study noted that while the Carney government “was elected on the promise of a new and different approach than its predecessor in how the federal government would manage its finances,” their findings reveal that in reality, there is no “plan to take a meaningfully different approach.”

“While the Carney government projects revenues will grow at a slower pace than previously expected by the Trudeau government, it still plans to outspend its predecessor by $67.6 billion from 2025/26 through 2029/30,” it said. “In fact, the Carney government plans to run combined deficits of $321.7 billion during this period, which is more than double the $154.4 billion the Trudeau government had planned to borrow.”

The study added, “not only will the Carney government continue the same fiscal approach, it plans to outspend the Trudeau government, run larger deficits, and accumulate even more debt.”