Chrystia Freeland, left, Canada's Minister of Finance, and Nate Horner, right, Alberta Finance Minister, walk together as Freeland hosts the annual meeting of federal, provincial, and territorial finance ministers in Toronto on Dec. 15, 2023.Nathan Denette/The Canadian Press
Don Drummond is Stauffer-Dunning fellow at Queen’s University and fellow-in-residence at the C.D. Howe Institute, where William Robson is chief executive officer.
Federal Finance Minister Chrystia Freeland has announced that the 2024 federal budget will be delivered on April 16. That is more than two weeks after the April 1 start of the budget year: fiscal 2024-25.
Late federal budgets have become a pattern. The 2023 budget was delivered March 28 – just three days ahead of April 1, and nowhere near early enough for Parliament or anyone else to even consider the fiscal plan before the year started. In both 2022 (April 7) and 2021 (April 19), the government also failed to get the budget out before the new fiscal year began. Go back a year earlier, and the situation was even worse. There was no budget.
It should be clear: Timely budgets with their tax and expenditure plans are good. Late budgets are not. This institutionalization of tardiness is hard to understand. Everybody affected by the annual federal budget – households, businesses, provinces and territories, government departments – should know the effects of the federal budget on their finances before the fiscal year begins so they can plan accordingly.
Budgets presented and passed after the fiscal year has started mean that the government is already spending money before Canadians and their elected representatives have seen the plan. Parliamentarians have seen departmental spending plans in the main estimates, but the late budget means those spending plans will not align with the bigger picture. The Liberals’ 2015 election platform promised to table the estimates with the budget. Yet the two are getting farther apart. This year the main estimates were tabled Feb. 29. Not only were the budget decisions obviously not included in them, but there will undoubtedly be important differences in the underlying assumptions between the two documents.
Budgets presented in February fit well with political and parliamentary schedules and support effective planning. The fall economic statement and the prebudget report of the House of Commons standing committee on finance come out prior to Christmas. Major budget decisions can be made in a mid-to-late January cabinet meeting. That leaves more than a month to finalize details and prepare the budget publication. Barring any late, unexpected events, and there are no significant ones currently, there is no reason budgets cannot be released in February – or early March at the latest – of each year.
Why would the Trudeau government deliberately delay the budget? No good reasons come to mind. A decision on the first phase of a national pharmacare program was made very recently, but that would be an easy addition. Awkwardly, the date chosen for the budget is six days after the next Bank of Canada interest-rate announcement. No doubt the overall economic mood, and possibly the budget’s reception, might improve if the Bank of Canada were to deliver the long-awaited cut in its overnight rate on April 10. But the government could not credibly claim that an undelivered budget played a part in the bank’s decision. In fact, for some years, large deficit-financed spending hikes have been compromising the Bank of Canada’s battle to return inflation to the 2-per-cent target. It is even possible that the bank will delay a rate cut it otherwise would have delivered in April because it worries that the coming budget will add to inflation pressures.
No good excuses come to mind either. The provinces of Nova Scotia, New Brunswick and Prince Edward Island consistently deliver their budgets before April 1, and table their main estimates with their budgets to boot. The federal government, with its vastly greater resources, could easily do the same. As the C.D. Howe Institute’s annual report card on the transparency and accountability of Canada’s senior governments emphasizes, the federal government’s size and national importance give it a unique responsibility to deliver budgets that are timely, transparent and reliable. Lately, the federal government has fallen down on that responsibility.
All of us are left only with downsides and no upsides to pushing the budget into the new fiscal year and institutionalizing tardiness. Delivering budgets in February would be a good plank in an upcoming federal election, and a promise worth delivering on.