The federal Liberals offered no plan for a return to balance in its fall fiscal update, and former lawmakers across the political spectrum disagreed Wednesday about the importance of a balanced budget.

Finance Minister Chrystia Freeland tabled the federal government’s fiscal update on Tuesday, including projections for a $40-billion deficit for 2023-2024 and an $18.4 billion deficit in 2028-2029.

Lisa Raitt, a former deputy Conservative leader who now serves as vice-chair of global investment banking at CIBC Capital Markets, said the Conservative Party is right to hammer in on the federal deficit, as higher borrowing rates force debt payments higher and further strain federal finances.

“What Conservatives are trying to drill in on is that fact that if you add more deficit, more debt and interest rates are going higher and higher, you’re going to have to pay more to service the debt,” she told BNN Bloomberg in a panel discussion on Wednesday.

“It’s a very simple equation for Canadians to understand and that’s why it’s good to make sure we’re bringing it back into balance.”

Raitt called the update a “missed opportunity” when it comes to business development and Indigenous loan guarantees.

John Manley, a former Liberal finance minister who is now a senior advisor with Bennett Jones, downplayed the importance of a balanced budget.

“Personally, I’ve never been a zero deficit fetishist,” he said. “It’s a nice target, but the notion of a fiscal anchor or fiscal guardrails, I think that’s very important.”

The fiscal update included new guardrails to keep deficits below one per cent of Canada’s GDP in 2026-2027, based on government projections.

Manley cautioned that guardrails are only effective if governments meet them, and said they can pose a risk to government creditability if they aren’t maintained.


Former NDP leader Tom Mulcair pointed out that the Liberals kept new spending to a minimum, with new measures focused on Canada’s most pressing needs. 

“It was not a statement that’s going to remain in the public eye for all of its fireworks or its splash, but they were targeting certain things,” he said. 

“I think they are laying down the path towards the next election.”

Mulcair added the government’s tone of fiscal responsibility puts its planned pharmacare plan in jeopardy.

“That would be such a big sticker price, there’s no way for them to respect what they just said yesterday if they bring that out now,” he said.

“This is something that’s been overdue, but it’s always a very poor cousin in all of these discussions.”

Last month, the Parliamentary Budget Officer found a single-payer universal drug plan would cost federal and provincial governments $11.2 billion in its first year, and $13.4 billion in five years.

With files from’s Rachel Aiello and The Canadian Press