Parliamentary Budget Officer Annette Ryan has raised concerns about missing details in the federal government's spending plans and its comprehensive expenditure review. In four notes released Monday assessing the Spring Economic Update tabled on April 28, the PBO highlighted a lack of transparency on key fiscal measures.
Defence spending transparency questioned
One report focused on the long-term defence spending path. Canada has committed $82 billion over five years to meet its NATO pledge of five per cent of GDP, with 3.5 per cent in core defence spending and up to 1.5 per cent in defence-adjacent expenditures. Ryan stated, "The signal is that we will be looking for those types of detailed estimates as the government goes along, from initial priorities, for example, as were set forth in Budget 2025." She noted that requests for information from the Department of National Defence are ongoing. The report warned that the plan would require an additional $159 billion in core defence spending by 2035–36, increasing the deficit by $63 billion and the debt-to-GDP ratio by 6.3 percentage points.
Operational spending savings unclear
The watchdog also criticized the lack of details on the government's progress to save $60 billion in operational spending over five years. Budget 2025 outlined $8.553 billion in reductions for 2026-27, but the fiscal update provided little information on departmental progress. Ryan said, "In as much as our function as a budget office is to keep watch on government finances and major priorities, to the extent that the comprehensive expenditure review was a major priority of the government in March 2025." She added that the lack of detail makes it difficult to "follow the money" and identify which departments are reducing spending.
Classification of spending criticized
The reports also highlighted a lack of transparency in how operational versus capital spending is classified. Last year, the government split expenditure into two categories: operational spending (day-to-day operations, transfer payments, public services) and capital spending (infrastructure transfers, tax incentives, R&D funding, housing measures). The PBO reiterated that definitions for capital spending remain too broad, making it hard to evaluate the fiscal anchor of balancing operational spending with operational revenue by 2028-2029.
The report concluded: "As such, it is not possible to advise in depth as to how updates to specific revenue and expenditure items presented in the [Spring Economic Update] contribute to the government's assertion that this fiscal anchor remains in balance."
