Mark Carney, Canada’s Finance Minister, is betting that massive public investment will position the Canadian economy for growth despite the ongoing trade war and shifting global geopolitics. By the 2030-31 fiscal year, the federal government is projected to shoulder $85.5 billion in annual public debt charges, with the hope that the investments will have paid off and transformed the economy by then.

While most experts back Carney’s plan, recognizing Canada’s need to boost investment and productivity, there are risks associated with taking on such a significant debt load. Sahir Khan, executive vice-president of the Institute of Fiscal Studies and Democracy at the University of Ottawa, warns that if the economy shifts and macro trends change, Canada could be left holding a pile of debt that failed to catalyze growth, investment, or job creation.

The key components of Carney’s plan include the “productivity mega-deduction,” which is expected to encourage businesses to invest in their companies by lowering Canada’s marginal effective tax rate to the lowest in the G7, and the “Canada growth incentive,” which allows entrepreneurs to avoid taxes on up to $15 million in capital gains if those funds are reinvested in a Canadian business. However, these measures come at a significant cost, with the productivity mega-deduction alone projected to cost $36 billion over five years.

Conservative shadow critic for innovation, science, and industry, Adam Chambers, expresses concern over the possibility of another global event crashing into the economy while Canada has taken on so much debt to deal with the current crisis. He warns that if the government’s bet is wrong, the financial health of the country could deteriorate quickly.

The federal government has touted Canada’s “fiscal capacity,” as the country has not borrowed as much as other advanced economies, resulting in lower borrowing costs. However, the list of unexpected events that have changed the economic landscape and made debt riskier is extensive.

By the end of the budget’s projections, the deficit will be lower, and the debt-to-GDP ratio will remain within the government’s guardrails. However, debt service payments will sit at $85.5 billion, the second-largest single expenditure in the budget, which should give everyone pause.

As Canada navigates the uncertain global economic landscape, Mark Carney’s bet on public investment and economic growth will be put to the test. The success of this gamble will determine whether the country emerges stronger and more productive or finds itself burdened with a significant debt load in the face of unexpected challenges.