From the Fraser Institute

By Jake Fuss and Grady Munro

Although Parliament is set to return next week for the first time in more than five months, Canadians are being asked for even more patience when it comes to a federal budget.

Last week, after conflicting messages from his finance minister, Prime Minister Mark Carney said his government will table a budget in the fall. While this is better than the government’s original plan to punt the budget into 2026, it’s still a long time to wait. Past federal governments have been able to quickly turn around a budget following an election. There’s no simply no reason why the government can’t deliver a budget within the next few months. Clearly, fiscal transparency and accountability are not high priorities for the Carney government.

While the federal government is not legislatively required to release a budget in the spring—spending is functionally approved in Parliament through periodic votes (the next vote is scheduled for June)—the budget provides a comprehensive and accessible outline of federal spending, taxing and borrowing plans now and for the coming years. In other words, an annual budget is a critically important financial and democratic document that informs Canadians on their government’s fiscal plan.

Budgets also help the public hold the government accountable to its campaign commitments. Without a budget, it’s virtually impossible for Canadians to know whether or not the government is actually staying true to its promises. For instance, the Carney government could run bigger deficits and accumulate more debt than promised, but Canadians would have little way of knowing. This only adds to the uncertainty around the government’s plan for certain key areas of policy—contradicting Prime Minister Carney’s promise of an “action-oriented” government that moves quickly.

The budget also allows parliamentarians to understand how the estimates and policies they vote on will impact the state of federal finances. For instance, the Carney government plans to cut income taxes, which will have a big impact on government finances. But without a timely budget, parliamentarians may not have the necessary information to make informed decisions on behalf of their constituents. Incidentally, the Trudeau government delayed the release of important fiscal documents to push off bad news until it garners less attention from the media and the public, and there’s reason to believe the Carney government is doing the same thing now.

The Liberal election platform—which currently provides the only indication of the new government’s fiscal plan—promises higher spending, larger deficits and more debt than the Trudeau government had planned in its last fiscal update. This flies in the face of Prime Minister Carney’s promise of a “very different approach” to fiscal policy. The Carney government also plans to split federal spending into two separate budgets: an operating budget and capital budget. This will further reduce government transparency by making it more difficult to identify the actual size of the deficit, while also giving the government leeway to get creative with its accounting.

Prime Minister Carney promised a new responsible approach to government finances. However, he’s off to a poor start on delivering this promise.