April 23, 2024

Weekly EconMinute—Federal Government Spending

In this week’s EconMinute, we’re talking about the federal government spending.

Last week, the federal government released Budget 2024 titled, “Fairness for every generation.” In it, the government announced a number of new spending priorities with a focus on housing affordability.

These policies get at an important, and in many ways urgent, issue. But instead of taking the place of other policy priorities, they add to government’s growing list. This is because, rather than making tough decisions, new tax measures enabled an overall increase in spending.

In other words, government is getting bigger. It has done so by blowing past its own spending expectations—not just in the most recent budget, but for years.  

So how much has spending actually increased? Here’s what we found:

  • The federal government expects to spend around $535 billion in 2024, over $25 billion more than expected as of last year’s budget. 
  • Over the next few years, the gap between last year’s expectations and this year’s will only grow. The government is set to spend $30 billion more as of 2027.
  • The last several budgets have added to this growing bill. Every budget tabled since 2021 has increased the tab for the current fiscal year by around $25 billion. 
  • All told, spending this year is expected to be $85 billion higher than what government estimated just three years prior.
  • Expectations from previous budgets do not extend through 2028 (the latest year forecast in Budget 2024). However, if the rate of spending growth in Budget 2021 were to continue, the federal government would be spending around $506 billion in 2028—a whopping $100 billion less than the $608 billion now expected.

This budget has been rightly described as a “tax and spend” budget. But what’s most concerning is that government has consistently failed to meet—or even be in the ballpark of—its own expectations for spending. This should be a concern for all Canadians. A budget that consistently blows past its own expectations raises questions of the need for future tax increases, a growing burden of debt, and even the value of a budget at all. 

Check out our full response to Budget 2024 here.

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