It’s been more than 10 months since Canadians got a close look at the federal finances in last fall’s economic statement. At that time, they learned the deficit for the 2023–24 fiscal year had ballooned by over 50 per cent.
Now, as the Carney government prepares to table its first fiscal blueprint, there’s talk once again of rising spending and soaring deficits. A recent Desjardins forecast estimated the deficit for the current fiscal year could exceed $70 billion. That’s a more than 65 per cent increase from what was forecast in Fall Economic Statement 2024. This news comes amid government promises for “generational investments” but also a request to ministers to find “ambitious savings.”
So, what should Canadians be watching for in the November budget? And, more importantly, as billions of dollars continue to flow from federal coffers, are parliamentarians well positioned to give this spending the scrutiny they’re meant to deliver on behalf of Canadians under our Westminster system?
To discuss this, former parliamentary budget officer Yves Giroux joins Inside Policy Talks. Giroux served seven years as PBO, finishing his term just last month.
On the podcast, he tells Ian Campbell, digital editor at MLI, that it’s less important which fiscal anchor the government chooses, but simply that it picks one and sticks to it over a period of time. With many forecasts predicting that Ottawa is set to drop yet another one of its fiscal anchors – this time, a declining debt-to-GDP ratio – Giroux says this “erodes the confidence of financial markets in the seriousness or the control that the government has over its own finances.”
Campbell and Giroux also discussed a number of long-standing issues with the federal fiscal cycle that make it difficult for parliamentarians to exercise a high degree of scrutiny over government spending. Giroux said with only two people in Ottawa holding real sway over what ends up in the budget – the prime minister and finance minister – it’s vital to make improvements to the fiscal cycle so parliamentarians can exercise a greater degree of oversight in this process.
