CTF PERSPECTIVE: Carney Continues Borrowing Binge in Budget Update

OTTAWA, ON: The Canadian Taxpayers Federation is calling on Prime Minister Mark Carney to work harder to find savings as the fiscal update shows this year’s spending is already projected to be $6.5 billion over budget.

“Carney just released his budget six months ago and he’s already on track to spend $6 billion over budget,” said Franco Terrazzano, CTF Federal Director. “The budget update shows the debt continues to spiral out of control because spending continues to spiral out of control.

“Every dollar Canadians pay in federal sales tax is going to pay interest on the debt and that’s unaffordable and unsustainable.”

The federal government will spend $594.8 billion in 2026-27, according to the budget update. November’s budget forecasted the government spending $588.3 billion in 2026-27. That means Carney is spending $6.5 billion over budget.

The federal government will borrow $65 billion this year. There is no plan to balance the budget and stop borrowing money. The federal debt will reach about $1.4 trillion by the end of this year.

While the government points to lower borrowing in 2025-26, it still borrowed $24.7 billion more than the deficit forecasted in the Trudeau government’s last fall economic statement.

Debt interest charges will cost taxpayers $58.7 billion this year. That’s more than the federal government will send to the provinces in health transfers ($57.4 billion) or collect through the GST ($53.4 billion).

“The Carney government will brag about a smaller deficit last year, but it still borrowed billions more than the Trudeau government planned,” Terrazzano said. “Carney needs to reverse course and put down the credit card because taxpayers can’t afford to waste more than $1 billion every week paying interest on the debt.”

The budget update shows the government is reducing the base Canada Pension Plan tax rate from 9.9 per cent to 9.5 per cent, beginning next year. This will save an employee earning $70,000 about $133, according to the government.

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