OTTAWA — A windfall from Canada's spring economic update has already been cashed in, according to the Chartered Professional Accountants of Canada (CPA Canada). While the federal government's spring economic update (SEU) paints a better-than-expected picture of the economy, much of the good news has already been spent, leaving little room to support the government's agenda of growth and increased productivity.
"The economic changes are lopsided towards improved government revenues rather than any real change in government spending," said David-Alexandre Brassard, chief economist with CPA Canada. "With revenues revised upward, the government didn't have to deliver the substantial savings in operating expenses it had outlined — and in fact fell short by about $30 billion in projected savings."
The optimistic forecast in the update is backed by high oil prices and Canada's resilient labour force, CPA Canada maintains, but the majority of the benefits have already been set aside for the government's headline programs. Brassard noted that more than 80% of newly created revenue in the update has already been spoken for, leaving little left to protect Canada's long-term fiscal goals.
Government exceeding spending: CTF
In their analysis of the SEU, the Canadian Taxpayers Federation calls on the Mark Carney Liberals to work harder to find savings. "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."
According to the update, the government is on track to spend $594.8 billion in the 2026-27 fiscal year, but Terrazzano pointed out that November's federal budget forecast government spending at just $588.3 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."
SEU step forward, but more needed to save jobs
The United Steelworkers (USW) praised the SEU for advancing "buy Canadian" initiatives, the Canada Strong Fund, and advancements for the skilled trades, but said more action was needed to protect jobs from trade-related instability. "The government has taken several steps in the right direction," said Marty Warren, USW's national director. "But the next step must be building the Canadian industrial capacity needed to turn these commitments into good union jobs. Public investment should support Canadian production, strengthen domestic supply chains and help the communities that depend on these industries."
Instead of defaulting to imports when products or materials aren't available from Canadian suppliers, the USW said those gaps should trigger targeted investments to expand or rebuild Canadian production — especially important in the steel, aluminum, forestry, and manufacturing sectors.
Increased security spending welcomed
Among those heralding announcements in the SEU was the Centre for Israel and Jewish Affairs (CIJA), which welcomed increased funding for the Canada Community Security Program (CCSP). "We welcome the government's strengthening of the Canada Community Security Program — more than doubling its funding allocation over five years from $60M to $135M," said CIJA CEO Noah Shack. "Since the Hamas-led massacre of October 7, threats targeting our community have continued to escalate. Canada's security agencies have warned that a violent attack against the Jewish community is a realistic possibility in the coming months. It's essential that government programs evolve to meet this challenge head-on."
