Canada’s federal and provincial governments are stumbling about in the current tough economic times – and Canadians are about to find out just how bad Ottawa’s fiscal situation is when the federal government delivers its first budget in more than 18 months. Prime Minister Mark Carney has provided the spoiler that the upcoming deficit would “be bigger than it was last year.” This week the Government House leader Steve MacKinnon told Canadians to expect a “substantial” budget deficit, while Finance Minister François-Philippe Champagne said his Nov. 4 budget will be a “generational investment” (also known as “overspending today so the next generation must pay for it”).
Spoilers and political rhetoric aside, here are four hard truths about the economic crisis the country is now enduring that Canadians must be concerned about – for the many who are barely coping today, and for the up-and-coming generations who will be saddled with Ottawa’s grand (and expensive) plans.
- The Carney government is outspending the Trudeau government.
The Trudeau government’s unbridled spending resulted in nine consecutive deficit budgets and the more than doubling of the national debt. In Canada’s Lost Decade under Justin Trudeau, Ottawa accumulated more debt than all previous federal governments combined. In the coming weeks the Carney government is expected to deliver a budget that outspends the previous administration and produces a larger deficit that heaps tens of billions of dollars more onto the national debt.
It appears the Carney Liberals have carried forward the same irresponsible approach to finances as the Trudeau Liberals. This week Interim Parliamentary Budget Officer (PBO) Jason Jacques observed to MPs on the finance committee that he “doesn’t know if the government currently has fiscal anchors” and this should cause a “considerable degree of concern.”
But how bad can it be? The Liberal election platform projected a $62.6 billion deficit this year – a full $20 billion more than the Trudeau Liberals had planned for back in 2024. Back in late June, the PBO factored with the government’s post-election promises, that the Carney government’s deficit will be closer to $70 billion. The C.D. Howe Institute projected it will be closer to $92 billion this fiscal year, which is the second-highest deficit in Canadian history, only surpassed in the 2020-21 pandemic year. There are also figures being floated in media that the Carney deficit this year could be more than $100 billion.
The serious ramifications of these continuous large deficits and mounting national debt are the increasing amounts of debt interest charges Canadian taxpayers have to pay. In the 2024-25 fiscal year it is costing taxpayers $54 billion in interest on the national debt. That is more than $1 billion dollars a week. In the next three to four years, the PBO projects the debt interest charges could reach $70 billion. And it could well be more with the Carney government’s spending habits. This money going to interest payments could be going to support Canadians’ healthcare, programs and social services, workers’ support – or to pay down the debt (isn’t that a novel idea?!).
- Alberta is carrying Canada – in spite of Ottawa’s interference.
ATB Financial’s economic outlook for the country, published last week, projects Alberta’s economy to grow faster than all other provinces, faster than the national economy, both this year and in 2026. It will do so with its abundance of “black gold” and the prospect of increasing its exports.
Alberta’s natural resources truly do fuel Canada’s prosperity. The Canadian Association of Petroleum Producers (CAPP), a non-partisan, research-based industry organization, reported that in 2022 the oil and natural gas industry accounted for $71.4 billion (3.2 per cent of Canada’s overall GDP), and generated a total of $94.5 billion in taxes and royalties for governments nationwide between 2021 and 2023. As of 2024, 90 per cent of this wealth is generated in Alberta.
It is no exaggeration that without Alberta, Canadians could not maintain their current standard of living. The Fraser Institute has calculated that from 2007 to 2022, Albertans’ net contribution to federal finances (total federal taxes paid by Albertans minus federal money spent or transferred to Albertans) was $244.6 billion – and this is more than five times the net contributions of B.C. and Ontario combined (the only other two contributors to the country’s wealth!). Albertans disproportionately contribute tens of billions of dollars to both Canada’s EI program and to CPP.
In spite of this province’s invaluable contribution, the Trudeau-and-now-Carney government’s treatment of Alberta during these challenging times is akin to Ottawa throwing an anchor to a drowning man. In a Hub exclusive, the news source reports that the Liberals anti-oil-and-gas climate policies will take nearly $1 trillion from Alberta’s economy by 2050. In a separate 2024 report, Deloitte factored the federal emissions cap would cost Alberta’s economy $191 billion over the next decade and, as a result, the Canadian economy will shrink more than $280 billion.
- The Ontario economy is imploding, and the Ford government has drowned the province in debt.
The Ontario economy is imploding; the once-engine-of-the-nation has stalled out. The Fraser Institute delivered the ugly news: “Ontario’s economy has fallen behind the rest of Canada.” The province recorded the lowest – the worst – GDP per-person growth nationwide from 2000-2022. In this century, Ontario went from having living standards that were 5.1 per cent higher than the rest of Canada to 3.2 per cent lower. In another report, the Ontario economy ugly nosedive is tracked and, yes, today Ontario is Canada’s laggard. There is no good news to be had: a new Ontario report found 38,000 jobs lost in the second quarter of 2025, unemployment is now at its highest in over a decade, and a new financial report projects a slow and sluggish provincial economy through the next 18 months due to the U.S. tariff and trade uncertainties. And then there is the negative impressions left by Premier Doug Ford’s elbows-up-anti-American-jock-talk and the lets-pour-Canadian-whiskey-in-the-dirt stunts.
Ontario’s sorry slide can be, in part, attributed to the Ford government’s undisciplined spending, the consecutive multi-billion-dollar deficit budgets, and the province’s mounting debt that places future Queen’s Park governments in a tight position. Ontario currently maintains one of the largest debt burdens of any province, and Ontarians are among the most indebted residents in the country. The 2025 provincial budget showed Ontario’s net debt is expected to reach $501.7 billion in just two years. A half trillion dollars in debt is huge – unprecedented for a province. By then, the Ford government will be responsible for adding nearly $150 billion in debt since taking office. Ontarians now pay more than $1 billion per month on Ontario’s debt interest charges. That is money that could go to hospitals, schools, infrastructure – even Ford’s coveted tunnel under the Toronto-stretch of the 401.
- Quebec is a welfare state – at best.
To right the Canadian economic ship, Ottawa must acknowledge that Quebec is a welfare state and must be weaned off the endless federal government handouts. For decades (since Pierre Elliotte Trudeau and the Power Corporation backroom boys landed in Ottawa), Quebec has received the lion’s share of what Confederation has to offer. There are the billions of dollars doled out to the Quebec corporate darlings SNC Lavalin (rebranded AtkinsRéalis), Bombardier, and the Port of Montreal to name a few. For no particular reason Montreal hosts the headquarters of Air Canada, CNR, and the Canadian Space Agency, and Gatineau has ensconced a number of transplanted federal departments. Most importantly, Quebec receives the largest amount of federal transfer dollars – an even larger bagful than Ontario – nearly 30 per cent of the federal pie, though Quebecers represent 22 per cent of Canada’s population.
Then there is the obvious inequity of the country’s equalization payments. Next year the federal government will collect a record amount of the equalization dollars ($26.2 billion), and Quebec will gobble up more than half the amount ($13.6 billion). It’s grossly absurd to think that in Canada’s Lost Decade, Quebec has received $129.9 billion in equalization payments.
La Belle Province has the reputation of being a low-income high-debt state, lagging behind the rest of Canada in productivity and growth-enhancing business investment. It manages with Ottawa handouts and its deficit budget financing. Today, Quebec has a debt burden that is far greater than its growth potential – its own economic capability to pay off its debt. In fact, Quebec and Manitoba have the greatest debt levels (141 per cent) that exceed the size of their economy – hence, the welfare label.
The economic news in the last few weeks has not been good for Canadians. Just this week we learned food insecurity and poverty is up 40 per cent over the last two years, and one in four Canadians now need to use a food bank. Statistics Canada reported the country’s economy has shrank more than expected in the second quarter, and the national unemployment rate jumped to 7.1 per cent – much higher double digits for Canada’s youth. Major crime has climbed 54 per cent in Canada’s Lost Decade. All this grim news as the Carney government continues to stumble forward making promises of billions of dollars of commitments to the European Union, NATO, Ukraine, China’s ship builders and the modular home industry. Considering the country’s present economic state, Canadians should brace for the worst with the Nov. 4 “generational investment” budget.
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
