Lower-than-forecasted deficit, new affordability measures expected in spring fiscal update

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.