Prime Minister Mark Carney’s 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.
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.
Ottawa said in a media release that this shift will help departments, businesses and policy-makers plan better for upcoming fiscal years, and help builders chart out the spring construction season.
Future budget consultations will now take place over the summer months, as they did this year.
The Liberals are also planning to split operating and capital spending in the upcoming budget — part of a promise to balance operating deficits in the former within three years.
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.
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.
Anything that’s not considered capital will fit into the government’s operating budget. Day-to-day program spending and transfers to Canadians and provinces not tied to capital investments will be considered operational.
The Carney government is presenting the split between capital and operating as a new lens on government finances that would augment — but not replace — traditional accounting metrics tracking Ottawa’s revenues, debts and deficits in the budget.
Canada’s business investment has stalled since 2015, falling well behind sharp growth in the United States and leaving the Canadian economy “less resilient,” in the government’s own words.
That’s a trend Ottawa said it wants to reverse with its new focus on capital in the upcoming budget.
Finance Minister François-Philippe Champagne is expected to take questions from reporters ahead of an appearance at the House of Commons finance committee Monday.
Picture Courtesy: THE CANADIAN PRESS/Justin Tang
