Business
New PBO report highlights the cost of ballooning bureaucracy
Without a thorough review, federal personnel spending could cost taxpayers upwards of $76 billion per year by the end of the decade, highlights the MEI in reaction to the latest report from the Parliamentary Budget Office (PBO).
“Federal priorities are determined by federal spending, and it is clear that Ottawa’s priority has been expanding the size and scope of government,” says Gabriel Giguère, senior policy analyst at the MEI. “If Prime Minister Carney is serious about returning to sound public finances, personnel spending will need to shrink, and fast.”
Total personnel spending is projected to reach $76.2 billion by 2029-2030, if nothing changes, according to the new PBO publication released this morning. This is up from $65.3 billion in 2023-24, a 16.7 per cent increase.
Average compensation is expected to reach $172,000 per full-time employee by 2029-2030.
When Prime Minister Carney’s predecessor, Justin Trudeau, came to power in 2015, personnel spending was $39.6 billion—a bit more than half of what it is today. Over the course of his tenure, the federal bureaucracy grew by over 100,000 employees.
Certain departments have grown substantially since 2015, including:
- Employment and Social Development Canada: +15,497
- Canada Revenue Agency: +17,257
- Public Services and Procurement Canada: +6,362
“New spending, programs, and taxes have gone hand in hand with the expansion of the federal workforce,” says Giguère. “If Ottawa is serious about cutting wasteful programs, it should begin by cutting the bureaucracies responsible for them.”
The C.D. Howe Institute recently projected that Prime Minister Carney’s first budget could feature a $92-billion deficit for 2025–2026.
Carney’s government has pledged to reduce spending by 15 per cent in select areas by the 2028–2029 fiscal year, following reductions of 7.5 per cent and 10 per cent in the two previous years, by shrinking departments and cutting waste.
In its prebudget submission, the MEI recommended that the federal government be more ambitious in carrying out this pledge. It called on Ottawa to reduce the federal bureaucracy by 17.4 per cent, mirroring the Chrétien reductions of the 1990s, which would eliminate 64,000 positions and save $10 billion a year.
Rolling back Employment and Social Development Canada, the Canada Revenue Agency, and Public Services and Procurement Canada to their 2015 levels could cut more than 39,000 full-time equivalent positions, halfway to that 64,000 goal.
“The fact that personnel has gone up with no measurable improvement in services is an indictment of the current system,” says Giguère. “Restoring balance means ensuring Canadians receive fair value for their taxes, and for that to happen, Ottawa needs to stop seeing the bureaucracy as a job creation scheme.”
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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
From the Daily Caller News Foundation
At Tesla’s Austin headquarters, investors backed Musk’s 12-step plan that ties his potential trillion-dollar payout to a series of aggressive financial and operational milestones, including raising the company’s valuation from roughly $1.4 trillion to $8.5 trillion and selling one million humanoid robots within a decade. Musk hailed the outcome as a turning point for Tesla’s future.
“What we’re about to embark upon is not merely a new chapter of the future of Tesla but a whole new book,” Musk said, as The New York Times reported.
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The decision cements investor confidence in Musk’s “moonshot” management style and reinforces the belief that Tesla’s success depends heavily on its founder and his leadership.
Tesla Annual meeting starting now
https://t.co/j1KHf3k6ch— Elon Musk (@elonmusk) November 6, 2025
“Those who claim the plan is ‘too large’ ignore the scale of ambition that has historically defined Tesla’s trajectory,” the Florida State Board of Administration said in a securities filing describing why it voted for Mr. Musk’s pay plan. “A company that went from near bankruptcy to global leadership in E.V.s and clean energy under similar frameworks has earned the right to use incentive models that reward moonshot performance.”
Investors like Ark Invest CEO Cathie Wood defended Tesla’s decision, saying the plan aligns shareholder rewards with company performance.
“I do not understand why investors are voting against Elon’s pay package when they and their clients would benefit enormously if he and his incredible team meet such high goals,” Wood wrote on X.
Norway’s sovereign wealth fund, Norges Bank Investment Management — one of Tesla’s largest shareholders — broke ranks, however, and voted against the pay plan, saying that the package was excessive.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk,” the firm said.
The vote comes months after Musk wrapped up his short-lived government role under President Donald Trump. In February, Musk and his Department of Government Efficiency (DOGE) team sparked a firestorm when they announced plans to eliminate the U.S. Agency for International Development, drawing backlash from Democrats and prompting protests targeting Musk and his companies, including Tesla.
Back in May, Musk announced that his “scheduled time” leading DOGE had ended.
From the Frontier Centre for Public Policy
By Conrad Eder
Frontier Centre for Public Policy study reveals a decade of inflated Liberal forecasts—a track record that casts a long shadow over Carney’s first budget
The Frontier Centre for Public Policy has released a major new study revealing that the Trudeau government’s federal budget forecasts from 2016 to 2025 were consistently inaccurate and biased — a record that casts serious doubt on the projections in Prime Minister Mark Carney’s first budget.
Carney’s 2025–26 federal budget forecasts a $78.3-billion deficit — twice the size projected last year and four times what was forecast in Budget 2022. But if recent history is any guide, Canadians have good reason to question whether even this ballooning deficit reflects fiscal reality.
The 4,000-word study, Measuring Federal Budgetary Balance Forecasting Accuracy and Bias, by Frontier Centre policy analyst Conrad Eder, finds that forecast accuracy collapsed after the Trudeau government took office:
- Current-year forecasts were off by an average of $22.9 billion, or one per cent of GDP.
- Four-year forecasts missed the mark by an average of $94.4 billion, or four per cent of GDP.
- Long-term projections consistently overstated Canada’s fiscal health, showing a clear optimism bias.
Eder’s analysis shows that every three- and four-year forecast under Trudeau predicted a stronger financial position than what actually occurred, masking the true scale of deficits and debt accumulation. The study concludes that this reflects a systemic optimism bias, likely rooted in political incentives: short-term optics with no regard to long-term consequences.
“With Prime Minister Carney now setting Canada’s fiscal direction, it’s critical to assess his projections in light of this track record,” said Eder. “The pattern of bias and inaccuracy under previous Liberal governments gives reason to doubt the credibility of claims that deficits will shrink over time. Canadians deserve fiscal forecasts that are credible and transparent — not political messaging disguised as economic planning.”
The study warns that persistent optimism bias erodes fiscal accountability, weakens public trust and limits citizens’ ability to hold government to account — a threat to both economic sustainability and democratic transparency.
Click here to download the full study.
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