Canadians should expect even more spending in federal fall economic statement

The Trudeau government will soon release its fall economic statement. Though technically intended to be an update on the fiscal plan in this year’s budget, in recent years the fall economic statement has more closely resembled a “mini-budget” that unveils new (and often significant) spending commitments and initiatives.

Let’s look at the data.

The chart below includes projections of annual federal program spending from a series of federal budgets and updates, beginning with the 2022 budget and ending with the latest 2024 budget. Program spending equals total spending minus debt interest costs, and represents discretionary spending by the federal government.

Clearly, there’s a trend that with every consecutive budget and fiscal update the Trudeau government revises spending estimates upwards. Take the last two fiscal years, 2023/24 and 2024/25, for example. Budget 2022 projected annual program spending of $436.5 billion for the 2023/24 fiscal year. Yet the fall economic statement released just months later revised that spending estimate up to $449.8 billion, and later releases showed even higher spending.

The issue is even more stark when examining spending projections for the current fiscal year. Budget 2022 projected annual spending of $441.6 billion in 2024/25. Since then, every subsequent fiscal release has revised that estimate higher and higher, to the point that Budget 2024 estimates program spending of $483.6 billion for this year—representing a $42.0 billion increase from the projections only two years ago.

Meanwhile, as spending estimates are revised upwards, plans to reduce the federal deficit are consistently pushed off into later years.

For example, the 2022 fall economic statement projected a deficit of $25.4 billion for the 2024/25 fiscal year, and declining deficits in the years to come, before reaching an eventual surplus of $4.5 billion in 2027/28. However, subsequent budgets and fiscal updates again revised those estimates. The latest budget projects a deficit of $39.8 billion in 2024/25 that will decline to a $26.8 billion deficit by 2027/28. In other words, though budgets and fiscal updates have consistently projected declining deficits between 2024/25 and 2027/28, each subsequent document has produced larger deficits throughout the fiscal outlook and pushed the timeline for balanced budgets further into the future.

These data illustrate the Trudeau government’s lack of accountability to its own fiscal plans. Though the unpredictable nature of forecasting means the government is unlikely to exactly meet future projections, it’s still reasonable to expect it will roughly follow its own fiscal plans. However, time and time again Canadians have been sold a certain plan, only to have it change dramatically mere months later due to the government’s unwillingness to restrain spending. We shouldn’t expect the upcoming fall economic statement to be any different.