This year’s federal budget was unusual for the relative absence of security surrounding it. Historically, budget lockups have been tightly guarded affairs. In exchange for advance access to the budget, reporters were required to surrender their phones, turn off the WiFi on their computers, and sign a document promising not to break the embargo.
Ostensibly the reason for this was to prevent those with prior access to this information from making unfair gains in financial markets – though the opportunity to bombard a captive audience of reporters with government propaganda for hours on end might also have played a part. Nevertheless, it was hallowed parliamentary convention. Finance ministers who presided over budget leaks sometimes lost their jobs.
But this time? No one took our phones, there was no undertaking to sign, no one even guarded the doors. We were, to all appearances, free to come and go as we please.
There are three possible explanations for this. One, there might not have been anything in the budget that would have rewarded insider trading. Two, the main points of the budget might already have been so thoroughly leaked in the days before its release – deliberately, that is, to shape news coverage – that there was nothing left to be revealed. Or three, the budget might have become so opaque, misleading and unreliable that no one could attach any meaning to it even if it were leaked.
There is some truth in all three. It was a pretty boring budget, as far as financial markets were concerned. Budget leaks have become so common over the years that the convention of budget secrecy was already pretty nearly dead. But for my money the third explanation is the most persuasive.
Once, budgets were conceived of as fairly straightforward exercises in disclosure – of the current state of the nation’s finances, and of the government’s future plans for spending, taxing and borrowing. That has gradually given way to a new idea of their purpose: misdirection and confusion. When no one can even understand what’s in the budget, what need is there to keep it secret?
You could see that in the initial assessments of the budget as “prudent” or even “frugal.” This, for a document whose declared aim was not only to spend more, after adjusting for inflation and population growth, than any budget in our history, but that has almost certainly understated that spending by billions of dollars – maybe even tens of billions.
True, if you look at the budget’s projection for future spending, it appears as a gradually sloping curve. Of course it does; every budget has a similar chart. But as the entire curve keeps shifting upward as these projections are revised, and revised, and revised, actual spending ends up rising at a much steeper rate than was ever projected.
But never mind future spending. Even the government’s current spending plans are almost impossible to make any sense of. Take the centrepiece proposal for a Canada Growth Fund, which would purportedly use an initial $15-billion in capital to lure three times as much private money into investing in “important national economic policy goals.”
How it would work, what it would do, why it should be expected to be any more successful at attracting private capital than the almost-wholly-catatonic Canada Infrastructure Bank were left vague. Fair enough: a detailed business plan will presumably follow. But you’d think the budget could at least say where the $15-billion is to come from. Not so: indeed, the budget allocates just $1.5-billion to it over five years, credited, impenetrably, to “Funds Sourced From the Fiscal Framework.”
A similar mystery surrounds the budget’s plans for defence spending. As presented, the budget calls for just $8-billion in new spending on the military in coming years. But it also projects spending over the next three years at $23-billion more than the Department of National Defence’s latest spending plans would indicate. Where is the extra $15-billion to come from? What is it to be spent on? No one is saying.
Then there are those strange adventures in fiscal time travel that every government indulges in, by means of which current spending is assigned to future years, or more rarely, slipped into the year just ending, the better to conform with whatever message the government is trying to put out at the time.
But the current government has taken this to a new level, cracking open the previous year’s books months after they were closed to stuff another $10-billion into them – obliging the auditor-general, having already approved the public accounts, to sign off on them again, in substantially altered form.
It shouldn’t take a forensic accountant to decipher the true state of the nation’s finances. Yet that is where we are. Maybe in future budget lockups the press should just not show up.
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Andrew Coyne