Business
Federal government’s accounting change reduces transparency and accountability
From the Fraser Institute
By Jake Fuss and Grady Munro
Carney’s deficit-spending plan over the next four years dwarfs the plan from Justin Trudeau, the biggest spender (per-person, inflation-adjusted) in Canadian history, and will add many more billions to Canada’s mountain of federal debt. Yet Prime Minister Carney has tried to sell his plan as more responsible than his predecessor’s.
All Canadians should care about government transparency. In Ottawa, the federal government must provide timely and comprehensible reporting on federal finances so Canadians know whether the government is staying true to its promises. And yet, the Carney government’s new spending framework—which increases complexity and ambiguity in the federal budget—will actually reduce transparency and make it harder for Canadians to hold the government accountable.
The government plans to separate federal spending into two budgets: the operating budget and the capital budget. Spending on government salaries, cash transfers to the provinces (for health care, for example) and to people (e.g. Old Age Security) will fall within the operating budget, while spending on “anything that builds an asset” will fall within the capital budget. Prime Minister Carney plans to balance the operating budget by 2028/29 while increasing spending within the capital budget (which will be funded by more borrowing).
According to the Liberal Party platform, this accounting change will “create a more transparent categorization of the expenditure that contributes to capital formation in Canada.” But in reality, it will muddy the waters and make it harder to evaluate the state of federal finances.
First off, the change will make it more difficult to recognize the actual size of the deficit. While the Carney government plans to balance the operating budget by 2028/29, this does not mean it plans to stop borrowing money. In fact, it will continue to borrow to finance increased capital spending, and as a result, after accounting for both operating and capital spending, will increase planned deficits over the next four years by a projected $93.4 billion compared to the Trudeau government’s last spending plan. You read that right—Carney’s deficit-spending plan over the next four years dwarfs the plan from Justin Trudeau, the biggest spender (per-person, inflation-adjusted) in Canadian history, and will add many more billions to Canada’s mountain of federal debt. Yet Prime Minister Carney has tried to sell his plan as more responsible than his predecessor’s.
In addition to obscuring the amount of borrowing, splitting the budget allows the government to get creative with its accounting. Certain types of spending clearly fall into one category or another. For example, salaries for bureaucrats clearly represent day-to-day operations while funding for long-term infrastructure projects are clearly capital investments. But Carney’s definition of “capital spending” remains vague. Instead of limiting this spending category to direct investments in long-term assets such as roads, ports or military equipment, the government will also include in the capital budget new “incentives” that “support the formation of private sector capital (e.g. patents, plants, and technology) or which meaningfully raise private sector productivity.” In other words, corporate welfare.
Indeed, based on the government’s definition of capital spending, government subsidies to corporations—as long as they somehow relate to creating an asset—could potentially land in the same spending category as new infrastructure spending. Not only would this be inaccurate, but this broad definition means the government could potentially balance the operating budget simply by shifting spending over to the capital budget, as opposed to reducing spending. This would add to the debt but allow the government to maneuver under the guise of “responsible” budgeting.
Finally, rather than split federal spending into two budgets, to increase transparency the Carney government could give Canadians a better idea of how their tax dollars are spent by providing additional breakdowns of line items about operating and capital spending within the existing budget framework.
Clearly, Carney’s new spending framework, as laid out in the Liberal election platform, will only further complicate government finances and make it harder for Canadians to hold their government accountable.
Jake Fuss
Director, Fiscal Studies, Fraser Institute
Grady Munro
Policy Analyst, Fraser Institute
From LifeSiteNews
A new report released by the Bank of Canada proposed a ‘promising architecture well-suited for basic payments’ through the use of a digital dollar, though most Canadians are wary of such an idea.
Canada’s central bank has been studying ways to introduce a central bank digital currency (CBDC) for use for online retailers, according to a new report, despite the fact that recent research suggests Canadians are wary of any type of digital dollar.
In a new 47-page report titled, “A Retail CBDC Design For Basic Payments Feasibility Study,” which was released on June 13, 2025, the Bank of Canada (BOC) identified a “promising architecture well-suited for basic payments” through the use of a digital dollar.
The report reads that CBDCs “can be fast and cheap for basic payments, with high privacy, although some areas such as integration with retail payments systems, performance of auditing and resilience of the core system state require further investigation.”
While the report authors stopped short of fully recommending a CBDC, they noted it is a decision that could happen “outside the scope of this analysis.”
“Our framing highlights other promising architectures for an online retail CBDC, whose analysis we leave as an area for further exploration,” reads the report.
When it comes to a digital Canadian dollar, the Bank of Canada last year found that Canadians are very wary of a government-backed digital currency, concluding that a “significant number” of citizens would resist the implementation of such a system.
Indeed, a 2023 study found that most Canadians, about 85 percent, do not want a digital dollar, as previously reported by LifeSiteNews.
The study found that a “significant number” of Canadians are suspicious of government overreach and would resist any measures by the government or central bank to create digital forms of official money.
The BOC has said that it would continue to look at other countries’ use and development of CBDCs and will work with other “central banks” to improve so-called cross border payments.
Last year, as reported by LifeSiteNews, the BOC has already said that plans to create a digital “dollar,” also known as a central bank digital currency (CBDC), have been shelved.
Digital currencies have been touted as the future by some government officials, but, as LifeSiteNews has reported before, many experts warn that such technology would restrict freedom and could be used as a “control tool” against citizens, similar to China’s pervasive social credit system.
The BOC last August admitted that the creation of a CBDC is not even necessary, as many people rely on cash to pay for things. The bank concluded that the introduction of a digital currency would only be feasible if consumers demanded its release.
Conservative Party leader Pierre Poilievre has promised, should he ever form the government, he would oppose the creation of a digital dollar.
Contrast this to Canada’s current Liberal Prime Minister Mark Carney. He has a history of supporting central bank digital currencies and in 2022 supported “choking off the money” donated to the Freedom Convoy protests against COVID mandates.
From the Canadian Taxpayers Federation
The Canadian Taxpayers Federation is calling on the City of Calgary to scrap the Calgary Arts Development Authority after it spent $65,000 on a telephone line to the Bow River.
“If someone wants to listen to a river, they can go sit next to one, but the City of Calgary should not force taxpayers to pay for this,” said Kris Sims, CTF Alberta Director. “If phoning a river floats your boat, you do you, but don’t force your neighbour to pay for your art choices.”
The City of Calgary spent $65,194 of taxpayers’ money for an art project dubbed “Reconnecting to the Bow” to set up a telephone line so people could call the Bow River and listen to the sound of water.
The project is running between September 2024 and December 2025, according to documents obtained by the CTF.
The art installation is a rerun of a previous version set up back in 2014.
Emails obtained by the CTF show the bureaucrats responsible for the newest version of the project wanted a new local 403 area code phone number instead of an 1-855 number to “give the authority back to the Bow,” because “the original number highlighted a proprietary and commercial relationship with the river.”
Further correspondence obtained by the CTF shows the city did not want its logo included in the displays, stating the “City of Calgary (does NOT want to have its logo on the artworks or advertisements).”
Taxpayers pay about $19 million per year for the Calgary Arts Development Authority. That’s equivalent to the total property tax bill for about 7,000 households.
Calgary bureaucrats also expressed concern the project “may not be received well, perceived as a waste of money or simply foolish.”
“That city hall employee was pointing out the obvious: This is a foolish waste of taxpayers’ money and this slush fund should be scrapped,” said Sims. “Artists should work with willing donors for their projects instead of mooching off city hall and forcing taxpayers to pay for it.”
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