Federal Fiscal Promises Lack Credibility

November 13, 2025 – Canada’s latest federal budget promises fiscal restraint, but recent experience provides sobering context. Successive projections for spending, deficits, debt, and total liabilities have repeatedly overshot their predecessors. The gap between the projections in the November 2025 budget and the projections in the Fall Economic Statement of 2024 continues this pattern, raising doubts about the budget’s credibility, according to a new Verbatim from the C.D. Howe Institute.

In “Fiscal Fantasies: Four Incredible Projections in the November 2025 Federal Budget,” William B.P. Robson documents the increases in spending, deficits, debt burdens, and total liabilities in the projections from the federal government each fall since 2022, and argues that this context is crucial for evaluating the November budget. “The numbers look reassuring in isolation, but when compared with past projections, they expose a government consistently overshooting its own spending and debt projections,” says Robson.

The report finds that total expenses for 2025/26 are now projected at $586 billion – more than $70 billion higher than forecast just three years ago. The deficit for 2025/26 has grown to $78 billion, up from a $15 billion projection in the 2022 Fall Economic Statement. Meanwhile, the debt-to-GDP ratio, a key measure of fiscal sustainability, has climbed from 40.4 percent in the 2022 plan to 42.4 percent today. Projections for total federal liabilities have also risen across the board, as the government has levered its balance sheet to make loans of questionable value.

“The government’s repeated overshoots of its own projections undermine the credibility of its fiscal plan,” Robson cautions. “Until Ottawa matches its words with stronger actions and results, Canadians have little reason to take the budget’s projections seriously.”

Read the Full Report

For more information, contact: William B.P. Robson, President and CEO, C.D. Howe Institute; Percy Sherwood, Associate Editor and Communications Officer, C.D. Howe Institute, 416-407-4798, psherwood@cdhowe.org.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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