Ottawa’s budgetary watchdog says it’s in the dark on Ottawa’s fiscal targets

The parliamentary budget officer says he can’t properly assess whether the federal government is on track to meet its fiscal targets because the Liberals’ new budget benchmarks haven’t been defined.

Without a spring budget, that means Ottawa’s budgetary watchdog is in the dark on how recently announced plans to boost Canada’s defence spending and cut income taxes will affect the government’s fiscal position.

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Prime Minister Mark Carney announced a plan before the spring election to split Ottawa’s budget into operating and capital streams, and to balance the operating side in three years.

Parliamentary budget officer Yves Giroux says in a new analysis that the Liberals haven’t yet defined what will be included in this operating budget, so there’s no way to say if the federal government is on track to meet its new fiscal targets.

The government’s old fiscal anchors were based on keeping annual budget deficits below one per cent of GDP and keeping debt-to-GDP on a declining path over the medium term.

Giroux does say the federal government’s deficit for the last fiscal year likely came in at $46 billion, roughly $4.3 billion lower than estimates in March, thanks in part to higher corporate tax revenues and the imposition of counter-tariffs against the United States.

This report by The Canadian Press was first published June 19, 2025.