Federal budgets have been drifting later in the year for decades, but this year marks an acceleration of that trend.
The Liberals are expected to table the 2022-23 budget in early April, marking the second one in a row to be introduced after the fiscal year has begun. Or three in a row, if one counts 2020, when there was no budget at all.
A delayed federal budget is more than just a political footnote – it can push the provinces to delay their own budgets. And Parliamentary Budget Officer Yves Giroux warns that the trend to later budgets is undermining Parliament’s oversight of public spending. “That’s the fundamental point, Parliament being in control of the purse strings and voting on the government’s spending plan that it seeks from the House and Senate,” he said in an interview.
Finance Minister Chrystia Freeland is expected to announce the precise timing of the budget in the Commons this week. If the budget is indeed tabled in the first week of April, it will still be a couple of weeks earlier than last year’s date of April 19.
The current federal government may be tardy in tabling its budget, but it is line with a long-term trend of Ottawa’s financial framework landing later and later in the year.
Brian Mulroney’s Progressive Conservatives typically introduced budgets in February, with the exception of their first effort in May, 1985, a postelection budget in April, 1989, and a pre-election effort in 1993 that was not introduced until late April. But for the most part, the Mulroney government’s budgets landed in mid- to late-February.
The Liberal government led by Jean Chrétien was, if anything, even more disciplined, with just one budget tabled later than February. But budget dates began to drift under Paul Martin’s Liberal government, with the 2004 version tabled in the third week of March.
Under Stephen Harper’s Conservatives, March budgets became the norm. Half of the Harper government’s budgets were tabled in that month. That trend was cemented when Justin Trudeau’s Liberals came to office, with three out four prepandemic budgets being tabled in the second half of March.
Only one budget from the Trudeau government, for fiscal 2017-18, was introduced before March 1. That date is significant because it is the fixed deadline for the tabling of the government’s main estimates, which are the mechanism by which Parliament approves Ottawa’s spending.
Mr. Giroux said that in recent years the budget has typically come after that March 1 deadline for main estimates, meaning that parliamentarians are debating and approving a document that doesn’t contain the full fiscal plan for the year. (However, those plans are later debated and approved through supplementary estimates.) A recent report from the PBO says that misalignment “undermines the ability of parliamentarians to meaningfully scrutinize proposed spending.”
It would be much better to implement a fixed budget date, he said, and give sufficient time for budget measures to be incorporated into the main estimates.
Cristine de Clercy, an assistant professor of political science at the University of Western Ontario, said the gradual shift of budgets to later in the fiscal cycle has happened as the nature of that document has itself been transformed from a “sterile framework” of spending plans to a broader political exercise that sets a government’s policy objectives. Consultation efforts have also lengthened as a consequence.
Mr. Giroux echoed that assessment, but said the federal government should still strive to push budgets back into early February, even in such a year as 2022, when war in Europe clouds the economic outlook and raises the prospect of a pivot to higher defence spending.
Mr. Giroux conceded that the 2020-21 fiscal year was an exception, since the extraordinary uncertainty created by the onset of the coronavirus pandemic in March, 2020, meant any spring budget would bear scant relation to reality. Still, the optimal approach in most years would be to introduce a fiscal plan and then amend it as circumstances dictate, he said.
However, Prof. de Clercy said she is sympathetic to the idea that an early budget could be overrun by events and rendered irrelevant. Much depends on the public trusting in a government’s budget, she noted. A pattern of budgets being discarded or extensively revised could undermine that trust, she added.
Given current circumstances, a short delay of a few weeks into April is preferable to an earlier budget that did not take full account how equity markets and the Canadian dollar have responded, Prof. de Clercy said. If that delay results in “a better budget that’s more trustworthy and accurate, then I think that’s rational,” she said.
As for a fixed budget date, Prof. de Clercy said there is merit to articulating an ideal date as a goal, but allowing for flexibility – as is effectively the case with the federal law for fixed election dates.
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Patrick Brethour