Canada’s 2025 Budget — Bucket 2: Capital Spending, Explained (TPL Economy)
We break down Bucket 2 of the 2025 federal budget: the capital expenditures Canada is now recording under accrual accounting—and what that means for deficits, debt, and real growth.

In this episode:
• Deficit vs. capital: why the $78.3B operating deficit (2026) sits beside capital, not inside it
• Borrowing needs: $137.9B (2026) rising to $147–149B (2027) and a $2.54T debt ceiling
• Capital totals: $45.4B (2026) and $56.7B (2027)—on top of the deficit
• What’s new vs. old: ~80% baseline programs from prior years, ~20% new initiatives
• Accountability gap: where are the guardrails, reporting, and ROI?
• Will these projects raise productivity & GDP by 2027—or do we pivot?

Chapters
00:00 Why capital is a separate “bucket” under accrual accounting
03:10 2026–2027 deficit, debt ceiling & borrowing math
07:45 Capital spend: totals, timing, and what actually gets built
12:30 80/20 split—baseline programs vs. new projects
17:20 Productivity test: projects that generate returns (not losses)
22:10 What the opposition should be asking: KPIs, scorecards, transparency
26:40 What if GDP doesn’t move? The pivot plan

Our take
If capital spending doesn’t translate into profitability, productivity, and exports, Canadians get the debt without the growth. We need clear metrics and public scorecards—fast.

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2025 Budget: New Accounting, Same Spending | PART 3

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