No Budget ?

The Liberal government of Prime Minister Mark Carney will not table a federal budget this year, Finance Minister François-Philippe Champagne said. He made significant justifications including the excuse to include a fall economic statement instead. This choice undermined Ottawa's fiscal credibility amid mounting international economic uncertainty.

However, the situation appeared even more dire. The foundation of our Parliamentary democracy and our Westminster model is “the power of the purse”. The primary role of Parliament is to scrutinize and approve government spending. Parliament is not the government, but an independent institution of the people, where the government (the Executive) must seek permission to tax and spend the people’s money, and to get legislation approved.

Parliament developed and evolved through the centuries before the invention of political parties and the position of a Prime Minister. Parliament is foundational to the governance of the nation.

Such a prolonged absence of a properly presented budget would strike at the very core of our democracy. It is not a matter to be taken lightly. A federal budget is the most crucial legislative matter a government can present. It serves as a vital update on the nation's financial health and outlines the spending priorities for which it must be held accountable.

The unusual decision marked the first time since 2020, at the height of the COVID-19 pandemic, that Canada had gone without an annual budget. Minister Champagne defended the choice with details, falsely claiming the need to prioritize a promised tax cut and a throne speech before Parliament adjourns in June. He rationalized by saying, “Canadians have seen the priorities we outlined during the campaign. We’re taking a step-by-step approach.”

The policy choice was a massive crack in Carney's credibility as a financial manager. With a huge finance department at his disposal, the Prime Minister was not credible if he could not present a budget. It was a ridiculous policy. It appeared to be the same behaviour that plagued the Liberals for the last decade, disregarding the basics of Parliament. Carney was a banker; what banker could not get a budget together to fulfil his constitutional duty to Canadians?

Conservative Leader Pierre Poilievre observed that Carney, a former Bank of England governor and hailed by Liberal supporters as an economic heavyweight, was abandoning his responsibility and accountability. “After months of promising ‘serious leadership’, Carney delivers delays and dysfunction,” Poilievre wrote on social media. “You don’t need a PhD in economics to know that hiding from a budget isn't governance." This criticism from the opposition is a crucial part of our democratic system, ensuring that the government is held accountable for its decisions.

The absence of a budget was a political signal that something was seriously wrong. While governments occasionally adjust fiscal timelines after elections, there was no practical reason for a “no-budget process”. Former Prime Minister Stephen Harper’s Conservatives tabled a budget in June 2011, just weeks after a May election. By contrast, the Liberals argued that more time was needed to factor uncertainty, pointing to volatile trade tensions with the US and sluggish global growth.

The avoidance struck at the heart of Carney’s political credentials. Carney campaigned on a pledge to restore rigor to federal finances. Instead, they appeared to be running away from their duty.

The nation is in dire need of a fiscal plan to navigate the uncertainty. The Liberal election platform was built on assumptions that may no longer hold. The economy is now weaker, and the deficit is likely higher. The absence of a budget was not just a procedural issue; it has significant implications for our financial future, and Canadians need to be aware. They are the legal plans for the government to signal to Canadians and the world where the economy is headed.

In front of cameras, Carney signed a meaningless document to symbolize the small change in income tax rates for the bottom tier. The actual change requires legislation, so we again have a Liberal image over substance.

Nevertheless, a full budget is not just a document for the financial community, as it is the core document for action for how a government will lead and implement its agenda. It is the roadmap for the government's actions. However, Finance Minister Champagne said they had several priorities to tackle before the House of Commons is scheduled to rise in June, but tabling a budget was not one of them.

It is unacceptable that the government would not put forward a full budget when it could. After months of building expectations and promising serious leadership, Carney announced that he would deliver nothing. Canadians were told that Mark Carney, the supposed serious economist, would bring competence. Instead, Canada observed dysfunction.

The budget is supposed to be tabled in April. However, due to the federal election and the fact that Parliament was prorogued before the election, no budget has been tabled this year.

However, the election timing does not prevent the government from tabling a budget. Parliament must still pass the primary and supplementary estimates, which are the legislative core needed for the government to function.

Governments must table main estimates once a year and supplementary estimates three times throughout the year. The main estimates need to be passed every year. The next deadline for the supplementary estimates to pass is June.

The House will return on Monday, May 26, and the ‘throne speech’ will be read the following day. A vote on the speech will be the first democratic test of “confidence” from Parliament that the Liberals must win to stay in power. However, the ongoing substantive test is to pass a budget in the House of Commons. The Liberals need a budget to be legitimate. The 'throne speech' sets the tone for the government's upcoming agenda, and the subsequent budget is expected to provide the financial details to support this agenda.

The Liberals were criticized for their ‘no-budget announcement’. It was outrageous that the government would not table a budget for over a year. Their excuse about too many moving parts to be accurate was not real. Competent bureaucrats could give 'best-and-worst' scenarios.

Canada needed a full budget in September at the latest. Their excuse implied that they did not take Parliament and legal governance seriously. A budget must honestly recount the international challenges, describe financial plans, and have them voted upon.

The Conservatives are right about the central behaviour of governance. The Prime Minister’s policy was demeaning to the nation and was not an acceptable standard. It seemed to be the slippery slope to despotism and top-down dictatorship by avoiding Parliament for its most central function.

By not attempting to come forward with an economic plan, they undermined any credibility about carefully managing public finances. Private sector business plans and the financial markets are left guessing. Private sector financing would be placed on hold.

By delaying in order to account for uncertainty, the government would create more uncertainty. Government bonds are used to raise funds. Investors will have less confidence in buying government bonds without a clear picture of the government's finances. Bond rating agencies would not like the government's failure to produce core financial documents.

The government uses “special warrants” to keep the lights on during elections. In May, a special warrant was issued to cover operating costs until June. These are "stopgap measures" that eventually must be voted on in Parliament.

Mr. Carney claimed during the election that he had a plan. He mocked the Conservatives by saying that a slogan is not a plan. However, the budget is the plan. Yet, the Liberals were saying ‘no budget’ and no prospect for one.

With all the government resources, there was no reason not to present a budget. The dishonesties were mounting up. They claimed to be fighting back against Trump's tariffs with Canadian tariffs, but then secretly removed them.

They also claimed to be the answer to the financial dilemma, but they had no budget plan. The repeated message was clear. The Liberal government would not table a federal budget this year. Finance Minister François-Philippe Champagne reconfirmed the policy to many media outlets.

Then days later, in answer to a media scrum in Rome, Prime Minister Mark Carney said on Sunday morning that he will table a Budget this fall. The change was a significant correction on the fly without a Cabinet meeting   —make it up as we go. Likely it was the Conservative response to the finance minister that revealed their serious error. They were embarrassed, as they had no plan when they claimed to have one. They were forced to change course to a sensible direction.

However, what does “the fall” mean? Maybe mid September or even December? Given all the dissembling and Liberal myth making, we must keep perspective, that Canada is about its people and the land, not the Liberal party. Canadians know what is needed, and they will eventually discover that the Liberals can’t deliver it.