Start with the deficit, because that’s where the mask really slips. Under Budget 2025, the shortfall is now projected to average $64.3 billion a year between 2025-26 and 2029-30. That’s not a rounding error. That is more than double what this same government told Canadians in the 2024 Fall Economic Statement. They looked you in the eye, gave you one number, then turned around a year later and quietly doubled it.
The PBO spells out why. There’s $87.0 billion in new “day-to-day” operating measures — that’s Ottawa-speak for more permanent spending — plus another $65.0 billion slapped onto direct program expenses because they now need bigger cushions for contingent liabilities, bad tax debts, and things like environmental cleanups. On top of all that, they’ve layered in $38.7 billion in new so-called capital measures that push the deficit even higher, with only $23.1 billion in other tweaks to soften the blow on paper.
In normal human language: they spent more, promised more, and had to admit old promises are blowing up the bill. Then they went hunting for an accounting trick to make the whole mess look smaller.
Just look at the before-and-after. In 2025-26, the deficit that was supposed to be $42.2 billion is now $78.3 billion. By 2029-30, what was sold as a $23.0-billion gap has ballooned to $56.6 billion. Every single year in between, the story gets worse, not better.
If a public company did this to its investors, the stock would crater, the CEO would be “spending more time with family,” and the auditors would be living in the boardroom. In Ottawa, they call it “a responsible plan for the middle class.”
Enter the magic trick: the “day-to-day operating balance.”
This is the number the Finance Minister has been waving around like a holy relic, swearing up and down it’ll be balanced by 2028-29. How do they do it? Simple. In Budget 2025, they split the books in two piles: one called “day-to-day operating balance,” the other called “capital investments.”
And in this new fantasy world, “capital” isn’t just real stuff the government actually owns — roads, buildings, equipment. Nope. It suddenly includes spending that’s supposed to “support investment” by private companies, Indigenous communities, other levels of government. Basically, if they squint hard enough, it becomes “capital.” The operating balance then gets held up as the shiny new “fiscal anchor.” ...
Instead of counting real capital, roads, ships, fibre lines, actual federal assets, and genuine capital transfers, they start tossing in corporate income tax expenditures, investment tax credits, and straight-up operating subsidies. Handouts. Incentives. Political candy. The PBO’s verdict is basically: nice try. These are policy measures, not capital formation. They are fiscal costs, not assets. You can’t pave a road with a tax credit.
So the PBO does what adults do and rebuilds the numbers using something tethered to reality: capital transfers, amortization of federal capital, and a limited slice of housing measures. Under the government’s “everything that moves is capital” approach, so-called capital investments from 2024-25 to 2029-30 come in at 32.2, 45.4, 56.7, 58.0, 59.7 and 59.6 billion a year. Under the PBO’s stricter, sane definition, that drops to 25.8, 32.5, 40.1, 40.2, 39.8 and 39.0.
Over the full period, Budget 2025 pretends there’s one pile; the PBO shows it’s about $217.3 billion instead, roughly 30% smaller, a $94-billion gap created entirely by creative labeling. Nothing real changed. Just the adjectives.
Now watch what happens to the operating balance once you scrape off the political makeup. With the government’s puffed-up “capital” numbers, Budget 2025 magically shows the so-called day-to-day operating balance gliding into a tiny surplus.
But use the PBO’s grown-up, reality-based definition and the illusion disappears. The operating budget never balances. Not once. The real numbers are a $10.5-billion deficit in 2024-25, $45.8 billion in 2025-26, $25.3 billion in 2026-27, $23.3 billion in 2027-28, $18.1 billion in 2028-29 and $17.6 billion in 2029-30. That’s not a path to balance. That’s a straight line of red ink with a press release stapled to it.
This is the part where, in a sane system, everyone stops pretending. If you need to invent a new category of spending, jam tax credits and subsidies into it, and declare them “capital,” just to claim you’re balancing your operating budget, you’re not being transparent. You’re doing accounting cosplay.
Our elected officials voted for this.
Canadians voted for this because Trump bad.
There won't be a Canada left at this rate.
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