Cloaking the budget process

But the pre-budget ritual and the hype that goes with it continues to be a useful political fiction.

Not that long ago, the annual budget was an important tool for keeping tabs on government spending. Without the budget, the main spending estimates, which MPs must use to gauge how taxpayers’ money is being spent, can’t be fully accurate.

As former deputy finance minister Scott Clark and Peter DeVries, a retired Department of Finance Canada mandarin, have noted, a budget must be tabled by mid-February to be of any use to Parliament in asserting its authority over government spending.

Under what are known as “supply rules of Parliament,” the main estimates must be submitted to Parliament by March 1, the first day of the federal fiscal year. The estimates, which detail the government’s spending intentions for the coming year, are then referred to Commons committees.

For the estimates to have any validity when MPs examine them, they must be based on the economic and fiscal assumptions in the budget for the coming year. But that can’t happen if the budget is tabled at the end of March, as has been the case in the last two years. In fact, of the eight budgets the Harper government has tabled since taking office in 2006, we have had a budget in time for the estimates only twice. So, when MPs approved departmental spending plans last June, they really didn’t know what they were approving.

Instead, the main estimates have had to be based on the economic and fiscal assumptions from the annual fiscal update from the previous autumn. In 2012, for example, the departmental spending cuts in that year’s budget were not included in the 2012 spending estimates. Examination of how effective those spending cuts really would be was impossible.

Since backbench MPs have been showing more backbone in the private members bills they present, perhaps there is an MP among the 308 seats in the Commons willing to take this disconnect on. A law making it mandatory for budgets to be tabled by mid-February would do the country a great service.

Alternatively, Justin Trudeau might want to put this forward as a first proposal in his yet to be filled policy playbook before the 2015 election.

There are other things missing from the budget estimates. Refundable tax credits are not included, when they should be listed as expenses. And the estimates list expenses on a cash basis although the budget spending is on an accrual basis. As a result, the president of the Treasury Board and the finance minister report different spending totals.

Since 1996, federal governments have based their economic forecasts in the budget on an average of private-sector forecasts, giving finance ministers an out if budget forecasts are missed. Forecasts by Finance Canada, which has much more information to track the economy, are not published.

There was a time when budgets were much thicker, with sections about what the government was thinking. Traditional budgets even included discussion papers. As a result, those budgets stimulated healthy democratic debate about Canada’s economic future.

For today’s secrecy-prone government, such debate is out of the question. But there is plenty to talk about, such as why Canada’s productivity continues to lag, what development of Ontario’s Ring of Fire mineral field would mean to Ontario and the rest of the country or what is needed to return Canada to trade surpluses.

Instead, we have a federal government that seems content with mediocre growth, while it spends $9 million in ads slamming the wireless industry, tells Ontario that development of the Ring of Fire field is the province’s problem, not Ottawa’s, and pretends that a balanced budget in 2015 after almost a decade of deficits is some kind of achievement.

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