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2d ago

Parliamentary Budget Officer Warns Ottawa’s New Fiscal Anchors Are Undefined

The Parliamentary Budget Officer cannot evaluate how planned defence increases or tax relief will affect Canada’s finances without clear spending definitions.

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Parliamentary Budget Officer Yves Giroux's latest report says that while his office predicted the Canadian economy would grow by 1.8 per cent in the fourth quarter of 2024 and 1.6 per cent in the first three months of 2025, growth was actually higher.
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Overview

  • Yves Giroux says the Liberals have not defined which expenditures count as operating spending under their new budget framework, making it impossible to track progress against fiscal targets.
  • Ottawa will split its budget into operating and capital streams and aims to balance the operating side within three years as part of its revised fiscal strategy.
  • The government plans to boost defence outlays by $9.3 billion this year to reach NATO’s two per cent of GDP spending target sooner than originally promised.
  • A one-percentage-point cut to the bottom income tax bracket carries a projected net cost of $28 billion over five years, according to the PBO.
  • Despite a likely $46 billion deficit—$4.3 billion lower than March estimates—the PBO warns that debt-to-GDP could rise if additional borrowing funds accelerated military spending.