Taxpayers can’t afford another Trudeau-style budget

All eyes are on Budget 2025 to see if Carney will finally rein in spending or follow Trudeau’s costly legacy

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Prime Minister Mark Carney sold Canadians on the idea that he’s the man with the plan to fix Canada’s economy and finances.

To make that image stick, he needs to show that the new boss isn’t like the old boss when it comes to government spending and debt. Budget 2025, his first since taking office earlier this year, is Carney’s chance to prove he’ll be different from former prime minister Justin Trudeau by cutting spending, reducing debt, and reining in Ottawa’s sprawling bureaucracy.

Carney must cut the debt to prove he’s different from Trudeau.

Trudeau doubled the debt in a decade. And Carney seems poised to continue his predecessor’s tradition of never-ending government borrowing.

“The current path we’re on in terms of federal debt as a share of the economy is unsustainable,” the Parliamentary Budget Officer, Parliament’s independent fiscal watchdog, said.

Carney’s annual borrowing will add about $255 billion to the debt over four years, according to the PBO. Trudeau planned to borrow $131 billion over those same four years, according to last year’s fall economic statement.

Carney plans to add almost twice as much debt over the next four years as Trudeau planned.

This is a big problem for Carney’s first budget. He said he can fix the finances, but that rhetoric will meet reality in his first budget. And if the PBO is right and the debt soars, it will be hard for taxpayers to believe Carney’s claims.

Those problems get bigger because more debt means more money wasted on interest charges. And debt-interest charges already cost $1 billion every week.

The debt exploded because the Trudeau government spent like crazy for years.

If Carney wants his first budget to prove he’s different from Trudeau, he must cut spending.

The Trudeau government was already spending at all-time highs before the pandemic, even after accounting for inflation and population growth. That means the government was spending more money in 2018 than it did during any single year of the Second World War.

Trudeau then used the cloud of a pandemic to continue his debt-fuelled spending spree. Of the $576 billion in new spending announced during the pandemic, $205 billion had nothing to do with the pandemic.

After a decade of out-of-control spending, any politician whose budget spends one dollar more than Trudeau’s should receive a failing grade. That’s especially the case for Carney, who sold Canadians on the idea that he’s a financial guru.

But it looks like the spending in Carney’s first budget will soar. The PBO expects Carney to spend $573 billion this year, which is $19 billion more than the government spent last year.

Here’s the real test for Carney’s first budget: it needs a plan to fire bureaucrats.

To put it bluntly, Carney can’t fix the federal budget unless he fires bureaucrats. That’s because Ottawa’s bureaucracy consumes more than half of the government’s day-to-day spending.

Trudeau told Canadians he would balance the budget. Then he told Canadians he would review spending and find $15 billion in savings. Those are things Trudeau failed to do because he continued to balloon the bureaucracy the entire time he was prime minister.

The federal government added 99,000 bureaucrats and increased the cost of the bureaucracy by 77 per cent since 2016. Even with that massive increase in bureaucracy, half of Canadians say federal services have gotten worse since 2016, according to a Léger poll.

In Budget 2025, Carney will likely talk about cutting waste and controlling spending in future years. But just like in the Trudeau era, that will be an empty promise unless Carney commits to significantly cutting the number of bureaucrats in the budget.

One of Carney’s key value propositions to voters was that he’s good with money and he will mop up Canada’s economic mess. Essentially, Carney sold Canadians on the idea that he’s different from Trudeau.

But if Budget 2025 increases spending, debt and bureaucracy, then Carney should get the same grade as the last guy: F.

Franco Terrazzano is the federal director of the Canadian Taxpayers Federation.