Pulling back the curtain on the Carney government’s first budget

Pulling Back the Curtain on the Carney Government’s First Budget

The federal deficit for this year is projected to reach $78.3 billion. This situation can be compared to the 1939 film The Wizard of Oz, where Dorothy and her companions journey to the Emerald City to meet the powerful Wizard, hoping he will solve all their problems.

Upon entering the Wizard’s chambers, they see a giant ghostly head that matches the image of the "Great and Powerful Oz." However, later in the film, it is revealed that the Wizard is merely an ordinary man operating machinery behind a curtain, much to their disappointment.

Similarly, Canadians may feel let down by the Carney government’s first budget, presented on Tuesday. Prime Minister Carney promised a “very different approach” from that of his predecessor in managing Ottawa’s finances. At first glance, the budget seems to offer this new strategy. But when the curtain is pulled back, it becomes clear that it is just an extension of the same failed fiscal policies that Canadians have endured for the past decade.

Context of Previous Fiscal Policies

The Trudeau government’s financial management was marked by record-high spending, persistent deficits, and a soaring debt load. This approach left behind a complicated fiscal situation.

In response, the Carney government, positioning itself as a “responsible fiscal manager,” pledged to address and clean up these issues.

New Budget Framework

The Carney government now divides spending into two main categories: “operating spending” and “capital investment.” Capital investment includes expenditures or tax measures aimed at long-term assets or infrastructure.

Prime Minister Carney promised a “very different approach” from that of his predecessor regarding Ottawa’s finances.

However, critics argue that despite this new classification, the fundamental fiscal challenges remain unresolved.

Author’s summary: The Carney government’s first budget, though presented as a new approach, largely continues the previous decade’s ineffective fiscal policies under a different label.

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Fraser Institute — 2025-11-06