The recent federal budget presented by Mark Carney has raised concerns about the government's spending practices. Carney's slogan, "Spend Less, Invest More," accompanied a proposal to separate federal finances into an operating budget and a capital budget. Critics predicted that this would lead to increased spending disguised as capital investment, and those predictions have materialized.

Conservative MP Sandra Cobena criticized the government's approach, stating, "The government is playing with the very definitions of capital and operating budgets by shifting tax breaks and subsidies into the capital column to give the illusion of fiscal prudence. It is not prudence; it is the manipulation of Canada’s budget."

A report from the Office of the Parliamentary Budget Officer (PBO) supports these claims, indicating that the government's definition of capital investments is overly broad. The report highlights that the Liberal government has classified $311 billion of its spending from 2024-25 to 2029-30 as capital investments. However, the PBO asserts that approximately $94 billion, or 30 percent, does not meet the criteria for capital investment. Examples include film and video subsidies and taxpayer support for battery manufacturing, which the government labels as capital-focused incentives.

While the government projects a decline in the deficit-to-GDP ratio from 2025-26 to 2029-30, the PBO estimates that the likelihood of this decline occurring each year from 2026-27 to 2029-30 is only about 7.5 percent. Other experts have also expressed skepticism regarding the credibility of Carney's budget. William Robson from the C.D. Howe Institute noted that the government has consistently revised its spending projections upward. For instance, the deficit for 2025-26 was initially projected at $42 billion but has now increased to $78 billion.

Robson pointed out that the government's previous fiscal projections indicated that expenses for the current fiscal year, 2025-26, would be $515 billion. However, Carney's budget now estimates this figure at $586 billion, reflecting a significant increase of over $70 billion. Given this trend of upward revisions, there are concerns that the latest projections may also underestimate actual spending.

In addition to spending, the government has also revised its deficit, debt-to-GDP ratio, and total liabilities projections higher in each fiscal update. One area where spending has increased is the military, which many view as a necessary investment. However, critics argue that much of the additional spending is not justified. This includes billions allocated for corporate welfare, such as a $5 billion Strategic Response Fund, increased subsidies for agriculture and forestry, and incentives for biofuels production. The budget also includes significant funding for various industrial policy strategies, raising further questions about fiscal responsibility and priorities.