Title: Canada to Introduce Federal Budgets in Fall

OTTAWA — Finance Minister François-Philippe Champagne announced significant changes to the timing of federal budget presentations on Monday. The Liberal government will now introduce the federal budget in the fall, moving away from the traditional spring release. The first budget under this new schedule is set for November 4.

Champagne explained that this shift aims to provide greater clarity for departments, businesses, and policymakers, allowing them to better plan for upcoming fiscal years. The government will now issue shorter economic and fiscal updates in the spring, closer to the start of the fiscal year on April 1. This change is expected to give parliamentarians more time to review fiscal plans before voting on them.

The new budget schedule will also allow for summer consultations, similar to this year’s process. Champagne emphasized that the changes would assist builders in planning for the spring construction season.

In addition to the timing changes, the government plans to separate operating and capital spending in the upcoming budget. This move aligns with Prime Minister Mark Carney's commitment to balance operating deficits within three years. Champagne noted that Canada’s business investment has stagnated since 2015, trailing behind growth in the United States. The government aims to reverse this trend by focusing on capital spending.

Capital investments will include direct spending on infrastructure, housing, and intellectual property, as well as any funding that encourages private sector investment. The government will evaluate whether spending qualifies as capital based on two criteria: if the funding is conditional on the recipient investing in capital formation and if it promotes capital investment in specific sectors.

Day-to-day program spending and transfers not tied to capital investments will be classified as operational. The Liberals have pledged that by the 2028-29 budget, the annual deficit will consist solely of capital investments, with operational spending covered by government revenues.

Champagne previously stated that borrowing to enhance Canada’s productive capacity is a prudent strategy. He anticipates that returns from capital investments will help reduce the deficit in future years. However, Interim Parliamentary Budget Officer Jason Jacques recently projected that the federal deficit could rise to $68.5 billion this fiscal year, up from $51.7 billion last year. He also cautioned that the government’s debt-to-GDP ratio may not continue its previous downward trend.

During a House of Commons finance committee meeting, Champagne faced scrutiny over Jacques' assertion that the current pace of government spending is unsustainable. Conservative MPs accused the Liberals of obscuring the true fiscal situation. Conservative finance critic Jasraj Singh Hallan remarked, "Debt is still debt at the end of the day. It doesn’t matter how many columns you try to put in front of Canadians to try and trick them."

In response, Champagne labeled the Conservative arguments as "irresponsible" and described the new capital and operating budget split as an additional perspective on government finances. He stated, "The capital budgeting framework is to provide more clarity, more transparency. It’s an additional lens. It’s not replacing anything."

Bloc Québécois MP Jean-Denis Garon expressed dissatisfaction with the new fall budget schedule. He argued that the finance minister has had sufficient time to provide a fiscal update since taking office in March. Garon stated, "What the minister tells us is that he’s been doing things so wrong that he needs to change the rules, and I think that’s not acceptable at the moment." He advocated for maintaining the spring timeline to better align provincial and federal planning.