As a young boy, I would watch my mom diligently read the newspapers and the flyers that came with them. She would cut out coupons and tuck them away for the next trip to the store. Today, newspaper coupons have been replaced by a flood of digital ones: app notifications, email blasts, loyalty offers and so on. Frankly, I get exhausted by all the coupon noise and simply ignore it. Over the past decade or so — particularly in the last year — I have come to feel much the same way about Canadian tax policy.
The Spring Economic Update: A Critical Moment
Ottawa will release its spring economic update on April 28, 2026. I have one hope for this announcement: no new coupons and significant expenditure reductions. Canada has developed a coupon-book tax policy over the past 16 months. What started under the Justin Trudeau government with a poorly thought-out two-month GST “holiday” from December 2024 to February 2025 has been expanded, rebranded and extended by the Mark Carney government into a rolling calendar of temporary measures, each one felt at a moment (the till, the pump, the direct-deposit date).
Carney's Announcements and the Risk of More Giveaways
On April 14, the day after the by-elections that converted his minority into a majority (with the crucial help of the floor-crossers), Carney announced the fuel excise suspension and, in the same breath, pre-announced that the spring update would include “some restructuring of already announced measures.” Translation: more coupons may be on the way. The question is whether they expand the book or replace it with something that resembles actual policy.
The C.D. Howe Institute's Warning
The C.D. Howe Institute last week published a report, Fiscal fantasy: Believe it or not, fiscal reality hasn’t gone away, but its view of the economic update was unambiguous. “Growth in the economy and government revenues is feeble — in part because high taxes and excessive borrowing are discouraging work and investment. Spending has roared ahead,” it said. “The federal government’s upcoming spring economic update must prefigure a change to fiscal realism. It must not feature more boondoggles like the juiced-up GST tax credit or its recent suspension of the fuel tax — another debt-financed handout that will do nothing for growth.”
Former Bank of Canada Governor's Call for Cuts
Former Bank of Canada governor David Dodge made a similar point last week: the government needs to cut, not simply spend and borrow more. The Department of Finance on Saturday reported a $31.2-billion budgetary deficit for the 10 months ending Jan. 31, 2026. With the budget in November projecting a full-year deficit of roughly $78 billion, government supporters and friendly pundits promptly suggested the year-end number might come in well below budget. But what they omitted is that the $31.2 billion does not include an additional $51.4 billion in “non-budgetary requirements” — predominantly loans, investments and advances that the government’s new capital budgeting framework would likely classify as capital — bringing the actual 10-month financial requirement to $82.6 billion. This sleight-of-hand accounting is deceptive and misleading.
Conclusion: A Call for Fiscal Responsibility
The government must resist the temptation to hand out more fiscal coupons. Instead, it should focus on cutting expenditures and implementing sound fiscal policies that promote long-term economic growth. The spring economic update is an opportunity to restore fiscal credibility, not to add more debt-financed giveaways that will do nothing to stimulate productivity or investment.
