Prime Minister Justin Trudeau’s plan to add billions of dollars in new annual spending has some economists worried that Canada is at risk of racking up unsustainable debt — especially if economic growth comes in worse than expected.
Finance Minister Chrystia Freeland’s latest budget added C$43 billion ($32 billion) in net new costs over six years, primarily by increasing health-care outlays and clean-technology subsidies to compete with the US Inflation Reduction Act. She’s wrong to describe the budget as prudent, with overall program spending set to balloon to 51% above pre-pandemic levels by 2028, according to Derek Holt, an economist at Bank of Nova Scotia.
