The deficit the Liberals promised vs. the one they delivered

I will begin this week’s report by giving the Liberal government some well deserved credit. When it comes to getting out their preferred political message, they do an excellent job.

A case in point was a recent CBC national news headline that read: “Liberals on better than expected ground, plan to spend billions on skilled trades in economic update.”

That headline followed the release of the Liberal government’s so called “spring economic update” and leaves readers with a very clear impression: that the government’s finances are improving and that things are moving in the right direction. But are they? To answer that question, we have to look beyond the headline and examine the numbers themselves.

The spring economic update forecasts yet another near record Liberal deficit, this time projected to reach approximately $66.9 billion. This is being presented as good news only because, in the fall budget tabled last year, the Liberal government projected an even worse deficit of roughly $78 billion. In other words, because the deficit is $11 billion less bad than initially forecast, CBC declared the government to be on “better than expected ground.”

That framing ignores the larger fiscal reality. To understand where we truly stand, more context is required.

In its final Fall Economic Statement, the former Liberal government, led by Justin Trudeau, laid out a fiscal path that forecast deficits steadily declining over the coming years. Under that plan, the deficit was expected to drop to roughly $31 billion. That $31 billion figure was the fiscal baseline inherited by the new government.

Instead of continuing along that already generous path, the current spring economic update now projects a deficit of nearly $67 billion—more than double what was forecast in the Trudeau government’s final fiscal plan. The numbers become even more concerning when measured against the Liberals’ own fiscal promises.

Under Prime Minister Trudeau, the Liberal government explicitly committed to three very specific fiscal guideposts. One of those guideposts was to maintain the 2023–24 deficit at or below $40.1 billion. In reality, the federal government recorded a deficit of $61.9 billion for that year—blowing past its own stated limit by more than $20 billion. Then came the leadership change.

When Mark Carney became Liberal leader and Prime Minister, he was very clear with Canadians. He repeatedly stated that the federal government had been spending too much. He emphasized that under the previous Liberal government, day to day government spending had been growing by about 9 percent per year, and he promised to reduce that growth rate to under 2 percent. That promise was not made by the opposition. It was made by the current Prime Minister himself.

Fast forward to this week’s spring economic update. Instead of a correction toward fiscal restraint, we see a projected deficit of nearly $67 billion—about $27 billion higher than the $40.1 billion fiscal limit the Liberals once told Canadians they would not exceed, and more than twice the roughly $31 billion deficit forecast in Justin Trudeau’s final Fall Economic Statement.

Despite clear campaign rhetoric about spending less and restoring discipline, the government’s updated fiscal plan moves in the opposite direction. This is not an ideological disagreement between government and opposition. This is a comparison between what the Prime Minister promised Canadians and what his government is now delivering.

Which leads to my question for you this week: how do you feel about the promise Prime Minister Carney made to spend less, in light of his government’s fiscal update released this week?

Your feedback helps me do my job. You are welcome to share your thoughts on my Facebook page, contact me by email at Dan.Albas@parl.gc.ca, or call toll free at 1 800 665 8711.