On Thursday, Prime Minister Mark Carney’s government will table its second federal budget since taking office in March 2025, and based on its record so far, we can expect more new spending and large deficits. Ottawa’s fiscal situation may rank low on the list of priorities for most young people in Canada. But make no mistake – more than any other group of Canadians, they’ll pay the price for this approach.
Sahir Khan, exec VP at the Institute of Fiscal Studies and Democracy on CBC: “10 cents of every dollar that taxpayers pay goes to paying the interest on that debt and it’s only going to get bigger.”
Accurate. Debt charges are already ~11% of revenue and projected to hit 13.6% by 2030–31—the fastest-growing major expense, more than doubling since 2021–22 and recently equaling ~90% of the headline deficit
But then softens it: “There’s nothing that tells us that we’re in any kind of danger zone. And particularly when you look at us compared to the other G7 countries, Canada’s doing quite well.”
This rests on low net debt. On gross debt Canada has seen one of the largest increases in the G7 since 2014; the federal debt stock keeps rising past $1.3 trillion. Interest is paid on the marketable debt, not the net figure
On the books: “Even though the operating budget is getting balanced and likely a year earlier, we are borrowing for all that capital. So it doesn’t show up in that operating budget balance, but it shows up when you’re issuing bonds…”
The operating/capital split is accounting trickery. The PBO has called the definition overly expansive and inconsistent—it reclassifies tax credits and subsidies as “capital,” improving the operating balance on paper without cutting total borrowing or the debt path
Khan is right that growth won’t jump from 1% to 2% overnight. The problem is the reassurance. “Not a danger zone,” with selective G7 comparisons, and acceptance of an operating surplus that depends on accounting reclassification understate a trajectory in which interest is already taking 11 cents of every revenue dollar and is projected to keep rising to 14 cents
Serious analysis requires serious accounting
— cbcwatcher (@cbcwatcher) November 5, 2026
