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OTTAWA \u2014 Finance Minister Fran\u00e7ois-Philippe Champagne on Monday unveiled major changes to how and when the Liberal government will introduce federal budgets in the future as the focus on Ottawa\u2019s current fiscal path intensifies.<\/p>\n
Champagne announced the Liberal government plans to table the federal budget in the fall going forward, ending the long-standing practice of releasing the document in the spring.<\/p>\n
The upcoming Nov. 4 budget will be the first tabled on the new schedule. The typically shorter economic and fiscal updates will now come in the spring, closer to the start of the fiscal year on April 1.<\/p>\n
Questioned by reporters Monday, Champagne argued this shift will offer the \u201cclarity\u201d departments, businesses and policy-makers need to plan better for upcoming fiscal years.<\/p>\n
The budget will now be tabled months ahead of when the government issues the main estimates \u2014 a roundup of departments\u2019 annual spending that must be tabled by March 1 each year. Champagne said that will give parliamentarians more time to review fiscal plans before voting on them.<\/p>\n
He also argued it would help builders chart out the spring construction season.<\/p>\n
Future budget consultations will now take place over the summer months, as they did this year.<\/p>\n
The Liberals are also planning to split operating and capital spending in the upcoming budget \u2014 part of Prime Minister Mark Carney\u2019s promise to balance operating deficits within three years.<\/p>\n
Canada\u2019s business investment has stalled since 2015, falling well behind sharp growth in the United States and leaving the Canadian economy \u201cless resilient,\u201d in the government\u2019s own words.<\/p>\n
That\u2019s a trend Ottawa says it wants to reverse with a new focus on capital spending in the upcoming budget.<\/p>\n
Direct investments in infrastructure, housing and some non-physical assets such as intellectual property will be classified as capital, as will any spending or transfers that stimulate such investments from the private sector, Indigenous communities or other levels of government.<\/p>\n
The federal government says it will use two criteria to decide whether spending counts as capital: whether the funding is conditional on the recipient investing in capital formation and whether the spending encourages or enables capital investment in specific sectors or projects.<\/p>\n
Anything that\u2019s not considered capital will fit into the government\u2019s operating budget. Day-to-day program spending and transfers to Canadians and provinces not tied to capital investments will be considered operational.<\/p>\n
The Liberals are pledging that by the time the 2028-29 federal budget is tabled, the annual deficit \u2014 what Ottawa is borrowing to fund its spending in a year \u2014 will be comprised solely of capital investments and all operational spending will be covered by revenues coming into the government.<\/p>\n
Champagne argued in an interview with The Canadian Press last month that borrowing to invest in Canada\u2019s productive capacity is a prudent path forward. He said the federal government expects returns from its capital investments to help pay down the deficit in future years.<\/p>\n
Interim Parliamentary Budget Officer Jason Jacques estimated last month the total federal deficit would balloon to $68.5 billion this fiscal year, up from $51.7 billion last year. He also warned that the federal government\u2019s debt-to-GDP ratio \u2014 previously a key fiscal anchor for the Liberals \u2014 might no longer be on a declining path over the medium term.<\/p>\n
Champagne appeared at the House of Commons finance committee on Monday, where members grilled him over Jacques\u2019 claim that the current pace of government spending is \u201cunsustainable.\u201d<\/p>\n
Conservative MPs accused the Liberals of covering up the government\u2019s real fiscal position.<\/p>\n
\u201cDebt is still debt at the end of the day,\u201d said Conservative finance critic and committee vice-chair Jasraj Singh Hallan. \u201cIt doesn\u2019t matter how many columns you try to put in front of Canadians to try and trick them.\u201d<\/p>\n
Champagne called the Conservatives\u2019 arguments \u201cirresponsible.\u201d<\/p>\n
He argued the split between capital and operating is a new \u201clens\u201d on government finances that will augment \u2014 not replace \u2014 traditional accounting metrics tracking Ottawa\u2019s revenues, debts and deficits in the budget.<\/p>\n
\u201cThe capital budgeting framework is to provide more clarity, more transparency,\u201d Champagne said Monday. \u201cIt\u2019s an additional lens. It\u2019s not replacing anything.\u201d<\/p>\n
Jean-Denis Garon, Bloc Qu\u00e9b\u00e9cois MP and finance committee vice-chair, said he is not satisfied with the federal government\u2019s new fall budget schedule.<\/p>\n
Garon told reporters after Champagne\u2019s appearance that the finance minister has been in his role since Carney took office in March and has had ample opportunity to table a fiscal update.<\/p>\n
\u201cWhat the minister tells us is that he\u2019s been doing things so wrong that he needs to change the rules, and I think that\u2019s not acceptable at the moment,\u201d he said.<\/p>\n
Garon said he would prefer to stick to the spring timeline, which allows provinces and parliamentarians to align their plans with a federal budget tabled near the start of the fiscal year.<\/p>\n
\u00a92025 The Canadian Press<\/strong><\/p>\n<\/p><\/div>\n