“Skipping a federal budget would have been a significant departure from convention while raising obvious questions about fiscal transparency, parliamentary oversight, and accountability,” observes Financial Post columnist and financial analyst Kim Moody. He reasons, “Transparency, oversight and accountability are not aspirational objectives. They are foundational to providing a responsible government. Trust in institutions will inevitably erode when public scrutiny is evaded.”
Moody argues that Canadians have a right to know how their money is being spent, parliament has a role to debate that spending, and the government has a duty to be transparent on its intentions to spend citizens’ money. This is the very essence of the parliamentary democracy that Canada has been guided by since inception, and the foundational principle of “no taxation without representation” established with the signing of the Magna Carta in 1215.
Therefore, it is a significant matter when a government openly declares it will not produce a budget as was the case last week when Finance Minister François-Philippe Champagne asserted that there would not be a detailed federal budget in 2025; the government intends to provide parliament with only a fiscal statement at some time later in the fall. Champagne made repeated statements that there was no need for a budget – even though it has been more than 400 days since the last budget address, and six months since there has been any parliamentary debate over government expenditures.
In a series of media interviews last week, Champagne related that the cabinet is managing the country’s affairs. The finance minister told reporters that he expects MPs, once parliament resumes, to quickly pass a cabinet motion on a multi-billion-dollar income tax cut – without debate or review on how it will factor into the government’s balance sheet.
Coincidently, independent media sources reported that the cabinet recently issued executive orders for two special warrants to release public funds for government operations. (Note that government subsidized legacy media did not report on this). The special warrants were signed by the Governor General and through an-order-in-council $40.3 billion of emergency funds were released on April 1st and another $33.1 billion on May 2nd. The tens of billions of dollars expended without parliamentary oversight by the Carney government is the largest sum of money ever spent in Canadian history by executive order. It is also noteworthy that on Dec. 10, 2024, the Trudeau cabinet used a special warrant to free up $21.6 billion for expenditures.
In the last five months the government has spent nearly $100 billion without providing details of the expenditures, without any parliamentary oversight or approval – with no transparent measure of accountability to Canadians. In fact, it has been over 400 days since the last federal budget. Most concerning is that the government’s fall economic statement revealed that for 2024-25 the government projections were off the mark by more than 50 per cent and tens of billions of dollars. Still, PM Carney met with his new cabinet post-election and made the decision to not provide a budget this year.
This decision was met with concern. Dan Kelly of the Canadian Federation of Independent Business stated, “This is deeply worrisome. In addition to the need for a budget to layout spending plans, there is a long list of time-sensitive outstanding items from the 2024 budget, 2024 fall economic statement, 2025 promises and the campaign.” Scotiabank economist Derek Holt said he is “unimpressed” that there would be no 2025 federal budget, “Canadians have a right to know the state of the government’s finances − like how bad are they now − and the planned consequences to deficits and debt. Otherwise, it feels like Canadians basically wrote a blank cheque on April 28th when they granted a minority government to the Liberal Party.”
Ian Lee, economist and Carleton University professor, considered what it meant for the Canadian economy, “The Liberal government’s decision to delay the budget makes it seem like there actually is no plan. They are trying to suck and blow at the same time and when it comes to economics of these kinds of issues that is the worst possible thing that they can do.” Lee suggests that potential investors in businesses and infrastructure projects are looking at the Carney government and they are seeing “instability, incoherence, confusion and contradictory messages.”
The political opposition leaders were highly critical of the government’s decision. Conservative Leader Pierre Poilievre called it “unacceptable” given the country’s uncertain economic state, “It is extremely unusual. It will send a bad signal to investors and ratings agencies, and a lot of people will wonder what the Liberal government is hiding about our finances.” When he was asked by a reporter “What does it mean for Canadians if there is not a spring budget?”, Poilievre offered, “It means spending is out of control.”
With the initial blowback, Prime Minister Carney stood firm to reiterate the comments made by his finance minister. He provided a number of rationalizations why his cabinet would continue to operate without any accountability to parliament – and by extension to the Canadian taxpayer. Carney stated that his government could not produce a budget before parliament’s summer recess, that he needed “greater clarity” around Canada-U.S. relations, and that he had yet to factor the fiscal implications of Canada’s military spending and commitment to NATO. Carney also added that his cabinet had made the decision to delay the budget until spring 2026 based on his extensive personal experience in the financial sector.
However, by the weekend, Carney did an about-face. At a Rome, Italy media conference, Carney let it be known that the government would table a budget in the fall session after all. Carney stated, “We will have a much more comprehensive, effective, ambitious, prudent budget in the fall.”
Canadians can hope that as “comprehensive, effective, ambitious, and prudent” the budget may be, it will also prove to be transparent and accountable. There are outstanding questions about the new government’s expenditures, promised on the campaign trail, that require detail. For example, the Liberals costed election platform promised an additional $130 billion of spending (a 71 per cent increase) on the Trudeau government’s previously published fiscal plan through 2029. This 2025-26 fiscal year there was a projected deficit of $62.3 billion ($20 billion more than Trudeau would have indebted Canadians). So, the budget should provide the details and parliamentarians will have the benefit of an updated spreadsheet of the government’s expenditures.
Likewise, the budget will provide details of government revenues, which the Liberal election platform forecasted would increase over its mandate by $51.75 billion. This increase will be taken in from trade tariffs, increased government fines and penalties, and savings from improved government efficiency. Canadian industries will want to know how much revenue the government will generate from Carney’s new industrial carbon tax and his carbon border adjustment mechanism. The most interesting line item for Canadians will be the amounts received from Canada’s retaliatory tariffs against U.S. imports.
On the point of the retaliatory tariffs, in the Liberals costed platform they factored revenue of $20 billion to be taken in on American trade. Given that the Carney cabinet dropped most retaliatory tariffs on April 16, it is impossible that in a matter of weeks the government would have collected $20 billion. More to the point, the cabinet made the decision to drop the tariffs three days prior to Carney making the costed platform document public. So, it is politically controversial that Canadians were led to believe the Carney Liberals would deliver a $62.3 billion deficit this fiscal year when they knew there was not going to be the tariff revenue source from the U.S. Carney and Champagne now have five months or so to plug this $20 billion hole in their budget or their deceptive sleight of hand will be exposed.
With the fall budget, Canadians may also hope to learn how the banking expertise of their new prime minister will curb the downward trajectory of the country’s economic fortunes. The finance ministers of the G7 countries met in Alberta as a prelude to the leaders being hosted by PM Carney in June – and this gathering of the world’s most advanced, dynamic economies drew attention to the fact that Canada ranks last and is slipping further behind all G7 economies. The Fraser Institute issued a study last week that reported Canada’s debt burden during the last 10 years had deteriorated the greatest of all G7 countries and is near-last of the 40 economies of the OECD members. This new study echoes many others published in the past few years and it is incumbent on the newly elected Carney government to halt Canada’s slide.
Last word goes to Kim Moody, a parting comment from his beforementioned Financial Post column, “Canada needs full a federal budget now ~ Canadians should be concerned by any attempt to obscure transparency and reject any justification for it.” Moody writes, “Sunlight is said to be the best of disinfectants,” Justice Louis Brandeis so appropriately stated. Instead of swaggering around with “elbows up,” it’s time for this new government to step into the sunlight and face Canadians directly — continuously. Our parliamentary democracy demands it.”
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
