{"id":284425,"date":"2025-11-15T09:37:17","date_gmt":"2025-11-15T09:37:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/284425\/"},"modified":"2025-11-15T09:37:17","modified_gmt":"2025-11-15T09:37:17","slug":"carney-has-limited-room-to-cut-taxes-as-debt-to-gdp-ratio-to-grow-pbo-national","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/284425\/","title":{"rendered":"Carney has \u2018limited room to cut taxes\u2019 as debt-to-GDP ratio to grow: PBO – National"},"content":{"rendered":"

Prime Minister Mark Carney\u2019s<\/a> government has \u201climited room to cut taxes\u201d with the fiscal deficit projected to balloon after Budget 2025<\/a>, a report by the Parliamentary Budget Office said on Thursday.<\/p>\n

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The PBO published its independent assessment of Budget 2025<\/a>, highlighting \u201cfinancial pressures and concerns about transparency.\u201d<\/p>\n

\u201cAccording to the PBO, the Government has limited room to cut taxes or increase spending if it wants to keep the federal debt-to-GDP ratio in 2055\u201356 at or below its current level,\u201d the PBO said in a press release accompanying the report.<\/p>\n

The debt-to-GDP ratio is an economic metric that measures a country\u2019s debt against the total value of goods and services produced in the country.<\/p>\n

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The federal debt-to-GDP ratio in Budget 2025 is projected to be higher compared with the 2024 fall economic statement, \u201cand is no longer projected to be on a declining path over the medium term,\u201d the PBO report said.<\/p>\n

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\u201cBudget 2025 projects the debt-to-GDP ratio will stay mostly stable over the next 30 years,\u201d interim parliamentary budget officer Jason Jacques said in a statement accompanying the report.<\/p>\n

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\u201cThis is different from the last three years, when fiscal policy provided more flexibility to deal with future risks.\u201d<\/p>\n

Budget 2025 projects a deficit of $78.3 billion, or 2.5 per cent of GDP, for the financial year 2025-26. The budget projects that the debt-to-GDP ratio will fall to 1.5 per cent by 2029-30.<\/p>\n

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Speaking at an event in Montreal on Thursday, Carney said the budget protects key social programs such as childcare, dental care, pharmacare, and the national school food program, as well as health, education, and social transfers to provinces and territories.<\/p>\n

\u201cThis budget makes responsible choices to right size government while protecting the essential social programs that give every Canadian a fair chance to get ahead,\u201d he said.<\/p>\n

Conservative Leader Pierre Poilievre said the PBO report \u201cblows the doors off Prime Minister Carney\u2019s phoney accounting and costly credit card budget.\u201d<\/p>\n

\u201cAnother election promise broken. Canadians can\u2019t afford the cost of Carney,\u201d Poilievre said in a post on the social media platform X.<\/p>\n

In September, Carney said his government did have fiscal anchors, responding to previous PBO concerns.<\/p>\n

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\u201cWe are going to spend less so the country can invest more. We are going to balance the operational budget in three years. We\u2019re going to have a declining level of debt,\u201d he said in the House of Commons in September.<\/p>\n

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The government has set fiscal anchors around the deficit, with an aim to balance the operating budget and make sure the deficit-to-GDP ratio declines over time.<\/p>\n

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However, the PBO said there is only a 7.5 per cent chance that the deficit-to-GDP ratio will fall every year from 2026-27 to 2029-30.<\/p>\n

\u201cThis means the Government\u2019s new anchor is unlikely to hold,\u201d Jacques said.<\/p>\n

The PBO also said the Carney government\u2019s definition of capital expenses is \u201coverly expansive.\u201d<\/p>\n

While operational expense is money spent on the day-to-day functioning of the government, capital investment is money the government sets aside and invests for long-term gains.<\/p>\n

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The PBO projects capital investments would total $217 billion from 2024-25 to 2029-30 \u2014 about $94 billion less than Budget 2025 estimates.<\/p>\n

\u201cTo improve transparency, an independent expert group should decide what counts as capital investment under the expanded definition,\u201d Jacques added.<\/p>\n

\n\t\t&copy 2025 Global News, a division of Corus Entertainment Inc.\t<\/p>\n","protected":false},"excerpt":{"rendered":"Prime Minister Mark Carney\u2019s government has \u201climited room to cut taxes\u201d with the fiscal deficit projected to balloon…\n","protected":false},"author":2,"featured_media":284426,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[105249,45,49,48,46,2659,714],"class_list":{"0":"post-284425","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-budget-2025","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-economy","13":"tag-mark-carney","14":"tag-politics"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/284425","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=284425"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/284425\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/284426"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=284425"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=284425"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=284425"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}