Budget watchdog worried Liberals have lost control of spending

As Carney’s government faces mounting criticism over its financial management, Canada’s interim parliamentary budget officer admits he has no idea whether the Liberals have any “firm fiscal anchors."

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As Prime Minister Mark Carney’s government faces mounting criticism over its financial management, Canada’s interim parliamentary budget officer admits he has no idea whether the Liberals have any “firm fiscal anchors” guiding Ottawa’s spending.

“I don’t know if the government currently has fiscal anchors,” Jason Jacques told MPs on the House of Commons government operations committee Tuesday.

“That, of course, causes the people I work with a considerable degree of concern.”

Jacques noted that previous Liberal governments set targets like capping the annual deficit at one per cent of GDP and maintaining a declining debt-to-GDP ratio. “It’s unclear where those stand,” he said, noting the current government has not reiterated them.

Carney has pledged to present a budget that separates operating and capital spending, promising to balance the operating side within three years while finding 15 per cent savings across departments. But Jacques warned that with no clear definition of “operating budget,” it is “impossible to assess the likelihood or probability of the government hitting any fiscal target.”

His remarks echoed a summer report from former PBO Yves Giroux and came as Government House Leader Steven MacKinnon acknowledged this week that the next deficit will be “substantial.”

Conservatives seized on the testimony.

In a statement Tuesday, the party said the PBO confirmed what Canadians have suspected: Carney’s plan to “spend less and invest more” is “pure speculation.”

The Conservatives warned a lack of clarity heightens business uncertainty and could lead to higher borrowing costs if Ottawa plays “fiscal games” with how it reports debt and deficits.

Jacques also cautioned against changing internationally accepted accounting definitions, saying it could create “conflation and confusion” and undermine the impartial standards used by Canada’s fiscal watchdog.

With the government yet to set a date for tabling its next budget, Jacques said his office will update Parliament with new fiscal projections next week, adding bluntly: “The deficit will absolutely be higher.”