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The amount of spending that Prime Minister Mark Carney committed to last month is eye-watering.

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The $9-billion boost to our defence budget and the pledge to the North Atlantic Treaty Organization (NATO) to eventually spend five per cent of our country’s gross domestic product annually amount to billions in the short term and hundreds of billions in the longer term. All these spending commitments have been made without presenting a spring budget.

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Asked by a reporter at The Hague Summit about how Canada will pay for all the spending, acknowledging the concerns by the Parliamentary Budget Officer (PBO) about sustainability, Carney made a visible eye roll before proceeding to give a non-answer. He defaulted to his usual talking points about how the government is committed to growing the economy, balancing the operational budget within three years and investing in Canada.

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The commitment to balance the operational budget sounds good, but it’s not. It’s a simple accounting trick designed to mask spending by moving costs to the “capital budget.” It doesn’t help reduce spending in the least and doesn’t consider the increased debt-servicing costs that will result from the increased, but less visible, spending.

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The PBO report the reporter was about our Canada’s year-to-date finances. It had the following eye-catching quote:

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“Unlike the previous fiscal anchor, the government has not defined how the new operating budget targets will be measured. Specifically, there is no commonly accepted definition of what is defined as “operating” or “non-operating/capital” spending. Hence, PBO is unable to assess whether the government’s recent fiscal policy initiatives presented in Parliament … are consistent with achieving its new fiscal objective.

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“PBO also notes that the government could fulfill its operating budget goals, and yet at the same time the federal debt-to-GDP ratio could grow because of additional borrowing for non-operating spending (for example, new acquisitions of weapons systems for the Canadian military). This means that the government could achieve its fiscal objective and yet be fiscally unsustainable.”

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The PBO is bang on. Regardless of how you account for such additional spending — operating versus capital — the amounts need to come from somewhere, either in the form of increased revenues — taxes — or cuts in government spending. Or both.

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I believe there is a lot of room to significantly cut expenditures without affecting core essential services such as health transfers, support for the vulnerable, defence, etc., especially when you consider how fast expenditures have been growing. Ten years ago, federal expenditures were $250.1 billion. For this coming year, it’s expected to be $486.9 billion — a 94.7% increase (revenues haven’t kept pace).

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However, my belief would need to be proven by a significant audit of such expenditures, not endless academic studies that suggest the government has plenty of fiscal capacity to continue spending.

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Without reining in growing expenditures, there is only one way to go: increased revenues, meaning more taxes. Former United States president Ronald Reagan once quipped, “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”