Prime Minister Mark Carney's spring economic update has been described as treating Canadian taxpayers like mushrooms: kept in the dark and covered with manure. Parliamentary Budget Officer (PBO) Annette Ryan's assessment of the update revealed that it raised far more questions than it provided answers.
Key Concerns Raised by the PBO
Canada Strong Fund Lacks Details
Carney's proposed $25-billion Canada Strong Fund, also known as the sovereign wealth fund, lacks crucial information needed for evaluation. Unlike typical sovereign wealth funds financed by surpluses, this fund would be backed by government debt. The update does not address whether interest payments on the added debt will be weighed against the fund's performance.
NATO Spending Target Unclear
The government has not provided details on how it plans to meet the NATO target of spending 5% of GDP on defence by 2035. The PBO estimates this would cost $159 billion in that year alone, add $63 billion to the deficit, and increase the debt-to-GDP ratio by 6.3 percentage points, contributing to a concerning upward trend in government debt.
Operating Deficit Promise Questionable
Carney's promise to balance the federal operating deficit by 2028-29 is impossible to evaluate without clear definitions of operating expenses versus capital investments. The previous PBO noted that Carney improperly labelled $94 billion of operating expenses as capital investments, meaning the government would fail to balance the operating budget as promised.
Major Projects Office Lacks Accountability
The effectiveness of Carney's major projects office, intended to fast-track approvals of nationally significant infrastructure projects within two years, cannot be assessed. No progress reports or scorecards have been published to track its two-year mandate.
Productivity Spending Without Metrics
Carney's promise from the November 2025 budget to commit $110 billion over five years to boost economic productivity lacks metrics to measure progress. Productivity, a key determinant of Canadians' standard of living, has been flat since 2022.
Expenditure Review Program Opaque
While the spring economic update claims the expenditure review program requiring 45 federal agencies to achieve savings of up to 15% over three years is well underway, no information on actual savings achieved in the current fiscal year or data on public service reductions has been provided.
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