Budget 2026 continues borrowing billions while debt interest costs $1 billion a week

“Budget 2026 shows government debt continues to spiral out of control because government spending continues to spiral out of control,” said Franco Terrazzano, CTF Federal Director. “Carney is spending $14 billion more than he said he would and taxpayers are losing more than $1 billion every week paying interest charges on the debt.”

The government is borrowing more than $60 billion this year, according to Budget 2026. The debt will reach $1.37 trillion by the end of the year. The budget has no plan to stop borrowing money.

Debt interest charges will cost taxpayers $60 billion this year, which is more than the federal government will send to the provinces in health transfers ($57 billion) or collect through the GST ($52 billion).

Paying interest on the federal debt is the government’s “fastest-growing expense,” according to a recent Parliamentary Budget Officer report.

The government is spending about $14 billion more than planned. The government originally said it would spend $588 billion this year. However, the government is now on track to spend about $602 billion this year, according to Budget 2026.

The government is borrowing tens of billions of dollars this year even though its revenue increased significantly. Budget 2025 projected this year’s revenue to be $523 billion. The government now projects its revenue to be $540 billion.

“Billions of dollars fell into the government’s lap, but it’s spending every dollar and still borrowing more than $60 billion this year,” Terrazzano said. “Every dollar Carney spends overbudget is another dollar he borrows and taxpayers are stuck paying interest on it.”

The CTF has pushed Ottawa to simplify the tax code for years and Budget 2026 says the government is “launching the most ambitious effort in decades to simplify the tax system.” The government is also providing some capital gains tax relief, which will save taxpayers $715 million over four years, according to the budget. The government plans to begin increasing its gas tax shortly after Christmas.

“The fastest, simplest and easiest way for the government to make life more affordable is to stop taking so much, but taxes are still way too high because the government is borrowing way too much,” Terrazzano said. “Carney needs to stop overspending so he can cut taxes further without ballooning the debt.”

For more information or to schedule interviews, please contact:

Franco Terrazzano
CTF Federal Director
Phone: 403.918.3532
Email: fterrazzano@taxpayer.com