EDITORIAL: Carney’s math isn’t mathing

In the real world, the Carney government is going to continue running deficits every year

Published Sep 24, 2026  •  Last updated 1 hour ago  •  2 minute read

Parliamentary Budget Officer Annette Ryan attends a Standing Senate Committee on National Finance in Ottawa on May 5, 2026. Photo by Hyungcheol Park /Postmedia Network

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For the second time in less than a year, the parliamentary budget officer has disputed Prime Minister Mark Carney’s claims on how and when he’s going to balance the federal operating budget.

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Annette Ryan’s report, released Thursday, said, contrary to Carney’s statement during his investment summit that he’s going to eliminate the operating deficit a year early in 2027, the PBO projects it will actually be a year late in 2029.

During the federal election, Carney promised to reduce the operating deficit to zero in 2028 as a key fiscal anchor for government spending.

The reasons Ryan gave for the discrepancy are similar to those reported by then interim PBO Jason Jacques last November — Carney’s classifications of what qualifies as capital versus operational spending are arbitrary, at times contradictory and lack transparency.

Jacques concluded 30%, or $94 billion, identified as capital spending in Carney’s first budget was actually operational spending and if properly accounted for, meant Carney would fail to meet his promise to eliminate the operating deficit by 2028.

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This controversy started because Carney redefined the federal deficit by splitting it into two components — the day-to-day operating costs of running the government and capital spending, financed by public debt, ostensibly to grow the economy.

In the opinion of the non-partisan, independent PBO, Carney is misclassifying operating costs such as corporate tax cuts, investment tax credits and operating subsidies to companies as capital expenditures, contrary to international public accounting standards and practices.

In the real world, the Carney government is going to continue running deficits every year and has no plan to balance the budget.

Its spring economic statement projected the federal deficit this year will be $65.3 billion; $63.1 billion in 2027; $57.7 billion in 2028; $56.2 billion in 2029 and $53.2 billion in 2030, raising Canada’s total public debt from $1.4 trillion in 2026 to $1.63 trillion in 2030.

While those figures will likely be revised downward in the next budget — largely because of increased federal tax revenue from high oil prices — annual deficits aren’t going away under Carney, regardless of whether the federal operating budget is balanced in 2027, 2028 or 2029.

Redefining what deficits are doesn’t change the fact all the money has to be paid back, with interest, by taxpayers.

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