Beware Carney’s borrowing bomb
Money the government borrows eventually has to be paid back, with interest, no matter how the government classifies it
Author of the article
ostmedia News
Published Nov 12, 2026 • Last updated 14 hours ago • 2 minute read
Carney 2026 budget 1
Prime Minister Mark Carney and Finance Minister Francois-Philippe Champagne meet before tabling the federal budget on Parliament Hill in Ottawa on Nov. 5, 2026. Photo by Blair Gable /Postmedia Network
Because of the way Prime Minister Mark Carney is spending our money, taxpayers have a lot more to worry about than the size of the federal deficit.
The even bigger concern is the rate of federal borrowing.
In its latest budget, the Liberals are pouring hundreds of billions of borrowed taxpayer dollars into crown corporations and other so-called arm’s length agencies to finance government programs.
These costs don’t appear in the federal books as part of the deficit.
Under what’s known as accrual accounting, this spending is classified as investments, rather than liabilities, even though it’s all being financed by government debt.
Adds to debt
Unless these investments return profits above the cost of financing them, they add to the debt, which taxpayers are responsible for paying.
Parliamentary budget officer Annette Ryan warned that federal borrowing of this type is growing at more than double the rate of federal deficits over the next five years – $732.9 billion compared to $333.3 billion.
“This obscures the realities of cash debt and raises questions about whether the current fiscal framework provides a complete and transparent picture of Canada’s fiscal sustainability,” Ryan wrote.
“Cash outlays drive borrowing, which … increase market debt and public debt charges, independent of how they are recorded.”
Borrowed money must be paid back with interest
There is no free lunch. Money the government borrows eventually has to be paid back, with interest, no matter how the government classifies it.
A previous PBO report warned that the feds misclassified $94 billion of operating expenses as capital investments, rendering meaningless the PM’s boast that he will balance the operating budget next year.
In fact, Ryan wrote: “A balanced operating budget should not be interpreted as a balanced fiscal position. By design, it includes debt-financed capital spending, meaning borrowing and debt can continue to grow while the target is being achieved.”
Kevin Lynch, a former federal deputy finance minister, warned in a Globe and Mail column that the Carney government has already spent its entire revenue windfall from high oil prices and inflation on new government programs rather than reducing deficits.
It’s also gambling that there will be no major global economic shocks over the next five years.
“Canadians had better hope the budget’s two big bets pay off,” Lynch concludes, because taxpayers will be on the hook whatever happens.
torontosun.com
Money the government borrows eventually has to be paid back, with interest, no matter how the government classifies it
Author of the article
ostmedia NewsPublished Nov 12, 2026 • Last updated 14 hours ago • 2 minute read
Carney 2026 budget 1
Prime Minister Mark Carney and Finance Minister Francois-Philippe Champagne meet before tabling the federal budget on Parliament Hill in Ottawa on Nov. 5, 2026. Photo by Blair Gable /Postmedia Network
Because of the way Prime Minister Mark Carney is spending our money, taxpayers have a lot more to worry about than the size of the federal deficit.
The even bigger concern is the rate of federal borrowing.
In its latest budget, the Liberals are pouring hundreds of billions of borrowed taxpayer dollars into crown corporations and other so-called arm’s length agencies to finance government programs.
These costs don’t appear in the federal books as part of the deficit.
Under what’s known as accrual accounting, this spending is classified as investments, rather than liabilities, even though it’s all being financed by government debt.
Adds to debt
Unless these investments return profits above the cost of financing them, they add to the debt, which taxpayers are responsible for paying.
Parliamentary budget officer Annette Ryan warned that federal borrowing of this type is growing at more than double the rate of federal deficits over the next five years – $732.9 billion compared to $333.3 billion.
“This obscures the realities of cash debt and raises questions about whether the current fiscal framework provides a complete and transparent picture of Canada’s fiscal sustainability,” Ryan wrote.
“Cash outlays drive borrowing, which … increase market debt and public debt charges, independent of how they are recorded.”
Borrowed money must be paid back with interest
There is no free lunch. Money the government borrows eventually has to be paid back, with interest, no matter how the government classifies it.
A previous PBO report warned that the feds misclassified $94 billion of operating expenses as capital investments, rendering meaningless the PM’s boast that he will balance the operating budget next year.
In fact, Ryan wrote: “A balanced operating budget should not be interpreted as a balanced fiscal position. By design, it includes debt-financed capital spending, meaning borrowing and debt can continue to grow while the target is being achieved.”
Kevin Lynch, a former federal deputy finance minister, warned in a Globe and Mail column that the Carney government has already spent its entire revenue windfall from high oil prices and inflation on new government programs rather than reducing deficits.
It’s also gambling that there will be no major global economic shocks over the next five years.
“Canadians had better hope the budget’s two big bets pay off,” Lynch concludes, because taxpayers will be on the hook whatever happens.
EDITORIAL: Beware Carney’s borrowing bomb
Because of the way Mark Carney is spending our money, taxpayers have more to worry about than the size of the federal deficit. Read more.
