Finance experts predict Tuesday’s spring economic update will contain a number of new economic measures aimed at tackling affordability and the wider economic challenges of the country, and they expect the update will show a smaller-than-forecasted deficit.
“That’ll be the headline number that will likely get a lot of attention,” said Sahir Khan, executive vice president of the University of Ottawa’s Institute of Fiscal Studies and Democracy.
Khan said government revenues are likely up thanks to an economy that is proving more resilient than expected as well as surging oil prices. Also, there are probably some delays in getting some promised money out the door, and that combination means a lower deficit.
At a news conference Monday, Prime Minister Mark Carney touted another reason.
“Because we’re good fiscal managers … the minister of finance, myself, the government, the cabinet, we focus on the numbers,” Carney said.
“And we were determined to get spending down with a lot of very difficult … decisions. You can’t do everything at the same time.”
In November’s budget, the projected deficit for the fiscal year just ended was $78.3 billion. A Department of Finance release just last week showed the government ran a deficit of $25.5 billion between April 2025 and February 2026 — well under that forecast with only one month remaining. The same budget projected a deficit of $65.4 billion for 2026-27.
Any deficit number outlined in Tuesday’s update will likely be too high for the leader of the opposition.
“We should have no deficit,” said Conservative Leader Pierre Poilievre in a letter he wrote to Carney. “And if I were prime minister right now, we would be on track to achieving that. But your Liberal government has made that impossible for this year.”
In a news conference Sunday, Poilievre warned that those April-to-February deficit numbers don’t yet tell the whole story.
“Wait for March Madness. That’s when Liberals like to push all the money out the door to their friends. And that’s when the deficit goes soaring,” said Poilievre.
“We all thought that it was impossible … for anyone to spend more recklessly than … Justin Trudeau. And then along came Mark Carney and said, ‘hold my champagne.'”
More than just the deficit
Economists say the deficit is just one number that can indicate how things are going. Many are looking at Tuesday’s update as a chance to look at business confidence and investment, because those are important indicators too.
“Those metrics aren’t showing a lot of good news,” Deloitte chief economist Dawn Desjardins said on CBC’s Rosemary Barton Live. Businesses are “extremely nervous” about what the economy is going to look like and are less likely to spend, she said.
Chief political correspondent Rosemary Barton speaks with Dawn Desjardins, Deloitte Canada’s chief economist, and IFSD co-founder and executive vice-president Sahir Khan about the current state of the Canadian economy and what they expect from Tuesday’s update. Plus, Nova Scotian Keely Corrigan discusses the challenges she is facing with the cost of living and the financial pressure she is experiencing.
Desjardins says the government seems to be doing all the right things, like diversifying Canada’s trade relationships. But those types of building blocks take time to show results.
And, of course, the world has only become more volatile since the last federal budget, due to the U.S. and Israel’s war with Iran.
Khan says he hopes the spring update will be transparent about what progress is being made — or not — on all the projects, measures and deals that have been announced in the past year.
“We have to worry about whether the project, the aspiration of this government is actually getting implemented and that Canadians are going to feel [the impact] in their households,” said Khan.
And that includes transparency on how the comprehensive spending review is going, which has involved cuts to government department spending, including public service jobs. Khan says it’s important for Canadians to get a clear picture of whether that is progressing as planned and where and how the savings are being reallocated.
Outstanding promises
With so much of the focus on the country’s economic challenges, and what to do about them, some stakeholder groups are urging the government not to forget other financial needs — and promises.
Canada’s Centre for Israel and Jewish Affairs (CIJA) points to the Liberal Party’s last election platform that promised to increase funding of the Canada Community Security Program. The CCSP helps at-risk communities and their places of worship, schools and community centres, to enhance their security in the face of hate-motivated crimes.
Instead of increased funding in the last budget, there was a promise for the public safety minister to consult with communities and come back with improvements to the program.
The CIJA is one of a number of groups hoping to see the government keep that promise in this spring fiscal update.
“Unfortunately, we have the unique circumstance of being the most frequent target of hate crime of any religious group in this country,” said Noah Shack, CIJA’s chief executive officer.
“And the level of intensity of these crimes has been steadily escalating. So while I’d love to be focusing on poverty reduction and the need to help vulnerable families, unfortunately the vulnerability that we need to be focused on right now is our fundamental safety.”
The finance minister put out a video on social media Sunday, framing his upcoming update as a bridge between the budget and the long-term goals that were outlined in that budget.
“We’re building on that plan with Canada’s first spring economic update as part of our new budget cycle,” said Finance Minister François-Philippe Champagne in the video, before listing his government’s accomplishments over the past year.
“The spring economic update is our plan to keep that momentum going. All while making life more affordable for Canadians today and for years to come,” he said.
