OTTAWA — The Liberals’ new economic update shows a smaller fiscal deficit than expected, but reveals Prime Minister Mark Carney still struggling with how to make Canadians feel better about their lives while they wait for the stronger country he promises to lead them to.

The books aren’t quite closed on the 2025-26 fiscal year, which ended March 31, but even after accounting for everything the federal government has done and promised since the November budget, the update says the deficit for that year will be $66.9 billion instead of the $78.3 billion expected just months ago.

Projections for the current year and those to come aren’t as dramatically better, but they’re still improved each year, by $100 million to $400 million.

This is even though the Liberal government has cut personal income taxes and scrapped Justin Trudeau’s increase to capital gains taxes. It’s cut the gas tax. Yet revenue has grown faster than the Finance Department projected last fall.

Personal income taxes are up because incomes are up. Taxes on non-residents’ Canadian income are up because the stock market is strong. Corporate income tax revenue is up, “reflecting steady profits, particularly in the financial sector.” It dips in future years because the government is letting corporations write off more capital investments, then is projected to increase again.

Spending on programs is lower than projected, partly because the government hasn’t had to pay out unemployment benefits it expected to. Where costs have gone up, it’s mostly for positive reasons, like bigger transfers to provincial governments that arise from higher-than-expected economic growth.

Carney boasted about the government’s “responsible fiscal management” on Monday as he announced his plans for a new sovereign wealth fund, but the amount of restraint that takes is limited. The Liberals have not just gone and spent all the money they didn’t expect to have.

The fiscal update’s numbers show that Canada’s economic situation is markedly better than the last budget anticipated. Yet polls, like this recent one from Abacus Data, indicate that the cost of living and the economy top Canadians’ collective lists of concerns.

A section of Tuesday’s economic update explicitly grapples with this mismatch. “Why Canadians Still Feel Their Budgets Are Strained—And What the Government Is Doing About It,” it’s titled. Overall inflation isn’t bad now and wages have grown faster than prices for three years, it says. But food and gasoline prices (especially lately) have kept increasing, and even when we’re buying things whose costs have stabilized, 2026 prices give us sticker shock.

“All macroeconomic indicators are green,” Finance Minister François-Philippe Champagne said in explaining the budget. But, he added, Canadians are asking, “What about me? …We need to help people where they are now.”

In his instantly famous speech at the World Economic Forum in Davos in January, Carney drew on Thucydides in saying that it feels too often these days that “the strong can do what they can, and the weak must suffer what they must.”

The connection between that lament and Carney’s relentless Canada Strong sloganeering—“Canada Strong For All” is right on the economic update’s cover—isn’t hard to make.

Insisting to voters that things aren’t that bad tends to go badly for politicians. Furthermore, the current state of affairs is fragile. U.S. President Donald Trump has mostly honoured the U.S.-Mexico-Canada trade agreement but he might tear it up tomorrow. We woke up one day at the end of February and he’d bombed Iran and then gas went up 50 cents a litre.

The task before Carney is to make Canadians feel strong, buying time for his agenda of getting big projects built and new trade deals done.

Monday’s Canada Strong Fund announcement is in that vein. Carney called it a sovereign wealth fund, inviting comparisons to similar vehicles created by oil-rich governments that had more money rolling in than they knew what to do with. Despite the better deficit numbers, that’s definitely not a problem the Canadian government has.

But the prime minister’s actual pitch for the fund was different. It’s intended to “create wealth for Canadians today and our kids tomorrow,” he said, by buying stakes in (presumably) profitable major projects, for the federal government and individual Canadians who decide to put their own savings into it.

Everyone, in other words, can be part of the ownership class, not just a helpless watcher of what big international money does.

Tuesday’s update offers yet more pocketbook help. The government proposes to cut Canada Pension Plan contribution rates a bit; a worker making $70,000 a year would get to keep $133 more of it, with an equal savings for his or her employer. Not a fortune, but nothing.

It’s expected to cost about $3 billion a year in foregone revenue for the Canada Pension Plan, but a recent assessment found that the plan will still be taking in slightly more than it needs in order to meet future obligations.

There’s money promised to improve Canada’s dozens of small-craft harbours, which matter a lot in their coastal communities.

There’s funding for sports, to host more international competitions and support national organizations like Tennis Canada and Canada Soccer.

“Communities love to come together to cheer on their friends and neighbours,” the update says. “Our athletes draw us together. They inspire and exhibit the qualities that set Canadians apart: Determination. Team spirit. Grit.” And so on for several paragraphs.

Does the Brier do measurable economic good in the same way as improving the container throughput at the Port of Vancouver? Not really. But a good curling competition, like seeing your kid play soccer on a nicely spiffed-up field, might be more use in attacking a national deficit in vibes.