Minister Mark Carney doubled down on his plan to use the government’s balance sheet to spur an investment boom in Canada, increasing borrowing and using a surge of tax revenue to plow billions into expanding the productive capacity of the economy.

In his second budget as prime minister, Carney laid out his vision for an “investment supercycle.”The document outlined billions in industrial spending on the electricity grid, nuclear plants, mining and forestry, along with a capital-gains tax break for some entrepreneurs and investors in smaller companies.

About a third of the planned new spending is for affordability measures and social programs, including topping up a tax benefit for lower-income adults and putting new funds into housing construction and other measures aimed at reducing homelessness.

The document, released by Finance Minister Francois Philippe-Champagne on Thursday, confirms that a government revenue windfall, driven in part by higher oil prices, has mostly been spent. The government’s key corporate tax policy, the so-called “productivity mega deduction” for capital investments, is the biggest ticket, carrying a C$36 billion price tag over five years. It was announced by Carney in September.

That tax-write off, other policies announced since April, and the new budget measures bring the net new spending to more than C$150 billion over the five years. The federal government is expected to run a C$62.3 billion deficit in the current fiscal year, or about 1.8% of the country’s gross domestic product.

Carney’s plans require significant borrowing, both for the budget deficit and for other capital spending requirements such as seeding the new sovereign wealth fund. In total, the document forecasts C$764.7 billion in planned borrowing over five years.

The budget’s foreword, co-authored by Carney and Champagne, argues Canada should make full use of its lower level of debt compared with its Group of Seven allies.

“Canada has the lowest net debt to GDP in the G7, the highest credit rating possible, and borrowing costs that are well below that of the United States,” they write. “Unlike what we are seeing in other advanced economies, Canadians -- not the bond market -- will determine our choices.”The net debt to gross domestic product ratio is 39.9% this fiscal year, lower than the 41.5% predicted in a spring update, because the economy has exceeded expectations. That ratio is expected to hold around 40% over the next five years. The government said it will balance operating expenses against revenues by next year.

“Carney’s ambition is to transform the Canada economy through an investment-first economic program, an ambition shared by the country’s business community,” said Theo Argitis, senior vice president at the Business Council of Canada. “Today we got a clearer picture of the cost of that program. The focus going forward needs to be on implementation, execution and political discipline in making sure these investments produce a big payoff.”That payoff, however, may be years away. The costs are also evident in the surge in interest charges that will prove more painful if the government’s plan doesn’t boost growth.

Public debt charges are expected to rise to 13.6% of revenue in about five years, from about 11% currently. Amid a surge in global bond yields, that borrowing could be considered a risk to the government’s plans over the long run, especially in the event of an economic shock that would require emergency spending.

“I worry there's some creative accounting going on under the hood,” said Randall Bartlett, deputy chief economist at Desjardins. He pointed to the roughly C$120 billion in higher revenues over the five years of budget projections. Some of that increase can be explained by elevated oil prices, but even so, the revenue forecasts appear “aspirational” relative to the growth outlook, he said.

The oil windfall is about C$7.8 billion for 2026-27, higher than was expected by the parliamentary budget office.

Bartlett said there are also some generous assumptions being made about how higher longer-term borrowing costs will impact the present value of some direct program expenses. That contributes to a cost reduction of about C$60 billion over the next five years, he said.

The Department of Finance assumed 10-year Government of Canada bond yields at about 3.7% for 2030, which is unchanged from the spring update. “They may be using different interest rate assumptions for discounting future liabilities than they are for their broader fiscal forecasts,” Bartlett said.

The budget also shows Carney increasing the federal government’s stake in the Canadian economy. Total assets on the government’s books are expected to rise to about C$1.6 trillion by 2031 from C$1.1 trillion today.