Spending. Then covering it up.

That’s the only fiscal strategy the Carney Liberals is good at.

They will spend an added $38 billion this year over last.

The Canadian Taxpayers Federation (CTF) calculates the federal government will spend $594.8 billion in 2026-27 And much of that — nearly $65 billion — will be borrowed money,

Interest on the national debt, which sits at about $1.4 trillion, will cost Ottawa (and taxpayers) nearly $59 billion this year. That’s more than federal health transfers to provinces ($57.4B) or total GST revenue ($53.4B), according to the CTF.

The only federal spending areas that exceed interest payments are seniors’ benefits and children’s benefits.

Yet despite all this, the federal Liberals keep insisting they will balance the “operating budget” by 2027-28. Prime Minister Mark Carney told his investment summit in Toronto last week that means the government’s day-to-day expenses will be in balance one year ahead of the schedule they set for balance in last year’s budget.

Not so fast. Parliamentary Budget Officer (PBO) Annette Ryan said Thursday it is highly doubtful the $547-billion operating budget will be balanced before 2030, a full two years later than Carey’s sunny projections.

And here’s where the coverup comes in.

Since last year, the Carney government has split federal spending into two budgets, operating and capital. The operating budget pays out health, education and welfare transfers to the province, funds seniors’ subsides and child tax credits, most of the civil service’s payroll, the purchase of supplies, rent and so on.

Meanwhile the capital budget is supposed to cover infrastructure, major projects and anything else that might be consider an “investment.”

But according to the PBO, the government plays accounting games with the capital budget, mislabelling a lot of operational spending as capital investment, thereby making operational spending seem lower than it actually is.

Ryan pointed out the way Ottawa defines its operating and capital spending is inconsistent, and isn’t as transparent as the definition used in other jurisdictions, such as the United Kingdom and Singapore, that have split budgets.

Having two sets of books, which is essentially what the Liberals are doing, allows the Carney government to hide a lot of operation spending in the investment column, thereby making it look as if they are balancing the budget quicker.

To top off its three-card monte budget process, the Liberals are taking credit for fiscal prudence that they are not practising.

John Fragos, spokesperson for Finance Minister François-Philippe Champagne, told reporters at last week’s summit, “A persisting commitment to fiscal prudence, discipline and spending efficiency … has moved up balancing the operating budget agenda by a whole year.”

Of course, the budget — operating or otherwise — will not be balanced ahead of schedule, or maybe never.

But to the extent that federal revenues are closing the gap with expenditures, it’s largely the benefit of higher-than-expected oil revenues.

Federal tax revenues were projected to rise just over three per cent this year. So far they have risen nearly 10 per cent, thanks to oil prices that are about 50 per cent higher than anticipated.

Want to know why Carney is going along with Premier Danielle Smith’s insistence that Alberta energy not be used as a bargaining chip in trade talks with the United States? It is solely because without the current level income from oil, Ottawa’s balanced-budget claims would evaporate.

Are there any plans by the Liberals to cut federal spending in a meaningful way? They claim to have marked out $60 billion in spending reductions over the next five years.

But as I said above, federal spending this year is slated to increase by $38 billion. Just this one year of spending increases could wipe out more than two years of planned cuts. One step forward, two steps back.

And there is no real evidence the Carney Liberals are taking a scalpel to spending.

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