The 2026 federal budget relies on optimistic economic growth projections and substantial borrowing, with annual deficits averaging $59 billion and borrowing requirements reaching $156 billion, raising concerns about rising debt-servicing costs and fiscal sustainability. Former PCO Clerk and deputy finance minister Kevin Lynch criticizes the government's expanding use of Crown corporations, new agencies and industrial policies, arguing that these initiatives risk increasing bureaucracy, costs and inefficiencies without delivering stronger economic growth. Lynch recommends establishing credible fiscal anchors, rebuilding fiscal reserves, targeting industrial investments with clear performance benchmarks and modernizing the federal public service to improve efficiency, transparency and accountability.
