Due to higher-than-expected revenues, the Parliamentary Budget Officer projects the 2024/25 federal deficit at $46 billion. That is $4.3 billion lower than its election-costing report estimate, and $2.3 billion lower than the fall economic statement.

“The revision to our estimated deficit reflects a $5.2-billion increase in our estimate for revenues in 2024-25, somewhat offset by a $1-billion increase in our estimate for expenses,” the PBO said in its June 19 Economic and Fiscal Monitor.

Higher revenues stem mainly from increased corporate income tax and customs import duties due to retaliatory tariffs on U.S. goods, as reported by the Financial Post.

Other findings include a higher than expected GDP during 2025 Q1, which is expected to flatline due to a slowdown in exports and business investment.

Since the April 28 election, Prime Minister Carney decided the federal budget, normally tabled in February or March, will not be released until after the House of Commons resumes sitting in September. He cites the impact of trade tensions and increased military spending for the delay.

Carney plans to split operational and capital spending into two budgets, aiming for a balanced operational budget in three years, though unclear measurements hinder fiscal assessment.

The Liberal Party platform promised $130 billion in new spending over four years, projecting a $62.3 billion deficit for 2025/26. Economists expect a higher deficit due to the increased defence spending announced last week.

Opposition MPs have demanded a budget or fiscal update before Friday's summer break for the House of Commons, to no avail.

During a Monday evening appearance before the Senate committee on national finance, Giroux pointed to the Liberal campaign platform as a guide, which projected a $62.3 billion deficit for the current fiscal year that began April 1. Since then, Carney has announced a $9.3 billion defence boost with $2 billion for Ukraine.

“We’ll certainly be between $60 billion and $70 billion in the absence of spending cuts elsewhere,” Giroux said, without providing specific figures. “The numbers are still in flux.”

Giroux clarifies that having no budget obscures how the government will incorporate increased defence spending. “That’s a lot of constraints,” he said. “Something’s got to give.”

New fiscal anchors aim to cut annual spending growth from nine to two percent by reducing waste, capping public service, ending duplication, and using technology to boost productivity.

Giroux admits that without a budget, reviewing the government’s spending requests in the estimates is difficult for MPs and senators. “The only thing you have to make that judgment is the Speech from the Throne, which was vague on details, to say the least.”

“We’ll certainly be between $60 billion and $70 billion in the absence of spending cuts elsewhere,” continued the watchdog, without providing specific figures. Cabinet, in its May 27 Throne Speech, promised to set “a reasonable target for reduction” of deficit spending but did not elaborate.

Parliament’s last Budget Implementation Act was passed on June 19, 2024, and the last Fall Economic Statement was tabled on December 16.

Parliament has not balanced a budget since 2007.

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