Canada's PBO projects delay in balancing operating budget

The Parliamentary Budget Office (PBO) reports that the Canadian federal government is projected to miss its target of balancing the operating budget by 2028-29, likely delaying the goal by one year.

According to the PBO, the government spent approximately $546.6 billion on operating expenses and $34.5 billion on capital costs during the 2025-26 period. The watchdog also raised concerns regarding the government’s classification of spending, noting contradictions in how certain programs, such as those for agricultural technology and climate solutions, are categorized as either capital or operating costs. The PBO suggested that the current method of splitting spending into two distinct ledgers makes it difficult to anticipate future spending patterns.