Parliamentary Budget Officer Yves Giroux said the absence of a federal budget is preventing MPs from having a full financial picture as they review and vote on the spending plans of federal departments.
In an interview, Mr. Giroux said the current situation highlights a long-standing complaint of MPs that there is a disconnect between the overall spending commitments presented in federal budgets and the specific amounts MPs vote on through a process called the estimates.
“They clearly don’t have a full picture,” said Mr. Giroux, who said the current spending numbers will inevitably change dramatically once budget measures are included. “They are asked to vote on an expenditure plan that’s very partial. So there’s virtually no capacity for them to determine whether it’s sufficient, too much [or] not enough, because they don’t know what the top-up will be when the budget gets tabled.”
The Liberal government had previously pledged to adjust the way spending is presented to Parliament so that budget announcements could be included in the main estimates, but those efforts have since been shelved. In addition, next week will mark the second anniversary since the last federal budget, as the Liberals skipped the document entirely in 2020 after the COVID-19 pandemic began. Canada was the only Group of Seven country that did not produce a budget in 2020.
The two-year gap is the longest stretch without a federal budget in Canadian history. Federal budgets can be released at any time during the year, but they are commonly tabled in February or March.
The government’s confirmation this week that it will not release a budget in March was sharply criticized as “utterly irresponsible” by Conservative finance critic Ed Fast.
“Canadians and parliamentarians alike are not being provided with the complete facts on the state of our economy,” he said in a statement. “Hundreds of billions of dollars are being spent without any accountability or transparency from this Liberal government.”
Finance Minister Chrystia Freeland’s office said this week that a budget will be released at some point in the spring.
The estimates documents are voted on throughout the year. The main estimates, which were tabled on Feb. 25, outline the base funding levels for each federal department for the fiscal year that begins April 1. They include $141.9-billion in spending that requires the voted approval of MPs and describe an additional $200.3-billion in reoccurring spending that Parliament has previously approved, for a total of $342.2-billion.
These spending plans are then topped up throughout the year through supplementary estimates, which can be used to include measures that were announced in a budget after the main estimates were released.
The PBO’s report Wednesday says the main estimates show federal spending on COVID-19 will drop from $159.5-billion in the current fiscal year, to $22.7-billion in the coming fiscal year.
Mr. Giroux said pandemic-related spending is likely to be significantly higher than $22.7-billion once measures are announced in the budget, yet MPs are required to work with numbers that are clearly out of step with the government’s actual spending plans.
In the absence of a budget, Ms. Freeland’s November fall economic update stands as the most current official assessment of federal finances. That document said the 2020-21 federal deficit was projected to be $381.6-billion. However, it added the deficit could be closer to $400-billion if the pandemic required further shutdown measures, which ultimately did occur after the update was released.
Wednesday’s PBO report also examined federal spending on public debt, which is projected to be about $21-billion, a figure that is $2.8-billion less than prepandemic borrowing costs.
“Despite the record increase in federal debt in 2021-21, PBO expects the federal debt servicing burden to continue to decline due to low interest rates throughout the medium term,” the PBO report states.
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