Opinion by Carle Jasmin: Canada and the Budget Deficit
Image: Meta AI / Gay Globe
In recent weeks, opposition parties in the Canadian Parliament, led by the Conservative Party, have sought to stir public outrage by highlighting the new figures for the Canadian budget deficit, projected at around $100 billion. They claim it is a record deficit, that the Liberals have lost control of public finances, and that Prime Minister Carney is misleading Canadians.
Do not be fooled: these claims reflect less a serious economic analysis than a crude political scheme. Federal Conservatives know this very well but choose to distort reality to manipulate Canadian public opinion. Here is the truth.
Canada at the Top of OECD’s Best-Managed Economies
Canada maintains a solid and stable economy, despite recent attacks from President Trump. The country compares favorably with other similar nations, thanks in part to the Canada–US–Mexico Free Trade Agreement.
Higher current spending represents a temporary situation aimed at modernizing several aspects of the Canadian economy.
Canadians want the federal government to take a leadership role in solving the housing crisis, to increase retirement pensions, and for the Prime Minister to stand up to Trump, even at a cost.
Canada must also increase its military budget to counter Trump’s economic leverage and better control its borders to reduce external pressures.
Conservatives, however, support none of these measures.
The percentage of Canada’s national debt projected for 2025 relative to GDP will be high, but most of these are not recurring expenses. Like a mortgage, the deficit should be viewed as a cost spread over twenty to twenty-five years. Moreover, Canada benefits from virtually unlimited natural resources, which guarantees its debt and makes it a model envied by many OECD members.
Comparison with Other OECD Countries
Canada currently has a moderate budget deficit — around −2.1% of GDP for 2024. This level remains well below the OECD average, where deficits are higher.
Even though Canada’s deficit has increased recently, the country maintains a prudent fiscal position, unlike other economies with more structural imbalances.
Compared with France, Canada keeps a much lower deficit: roughly 2% of GDP versus nearly 6% for France. Canada’s deficit is also significantly lower than that of the UK (over 5%) and the US, where the projected deficit will exceed 12% of GDP in 2025 — comparable to the Great Depression.
When Politics Overshadows Truth
In politics, the truth is constantly filtered through the outrage of opposition parties, who often exaggerate facts to the point of making them almost unpalatable. It is crucial to recognize these alternative facts and understand that the government is following a strategic approach during a turbulent period in its history, caused by the actions of a former ally’s president. So far, Canada is coming out on top.