The budgetary deficit was $3.3B in August, expanding Y/Y on higher program expenses…

… led by EI, which is up 16% to date due to weak labour market conditions.

Tariff revenues have moderated the higher spend to some degree, rising $2.5B YTD - or 157%…

… but they’re immaterial in comparison to the coming wave of new spend. With the liberal budget set to be tabled on Tuesday, the question isn’t if the deficit will expand…

… but by how much - with the PBO forecasting an increase to ~$70B and some broker economics teams expecting worse.

Whatever the new target is, the financing wheels are already in motion - with roughly $90B of new borrowing announced YTD… buckle up.