Mon. Aug 8th, 2022


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ANALYSIS: Trudeau government nears the record for leaving Parliament without a budget

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In nine days — on Friday, Oct. 16 — the Trudeau government will have set what is to some eyes a dubious record: the longest stretch in Canadian history in which a Parliament has existed — without the government presenting a budget.

A week this Friday, the 43rd Parliament will have existed for 316 days — with no budget. The previous record holder was the Liberal government of Jean Chretien, which took 315 days between the first sitting of the 37th Parliament on Jan. 29, 2001, and its first budget, tabled Dec. 10, 2001.

Current Finance Minister Chrystia Freeland was asked just after the speech from the throne to provide her thinking about the value of a federal budget and whether she was committed to tabling a budget before the fiscal year ends on March 31. She curtly dismissed the question.

“The throne speech was clear that in the fall, we will be presenting a fiscal update,” Freeland said, apparently oblivious to the fact that one cannot update something — the 2020-21 budget — that does not exist.

At least her predecessor, Bill Morneau, when asked the same question, tried to excuse his way out of a budget by claiming forecasting in such a pandemic would be too difficult. Freeland has not even offered that.

And even if she did, that cannot be an excuse, said the former parliamentary budget officer Kevin Page.

“(Budgets) are fiscal plans. And to say that, ‘because there’s too much uncertainty, we’re going to manage without a plan’, is kind of bizarre,” Page said. “The reason we have plans is because there is uncertainty.”

Before becoming PBO, Page worked in the Finance Department helping to prepare budgets. These days, he’s the founding president and CEO of the Institute of Fiscal Studies and Democracy at the University of Ottawa.

Page acknowledges that budget preparation would be significantly different in the current year but he’s convinced there is a way to do it.

“It’s a different way of operating. Other people have adjusted,” Page said, pointing to, for example, the Bank of Canada. “I wonder if Finance (Canada) is really struggling with that adjustment.”

Even though the Trudeau government will soon pass the record for a Parliament with no budget, it still has a few weeks to go before eclipsing the record for the number of days between budgets. As of Oct. 16, the Trudeau government will have gone 577 days since the last federal budget, presented on March 19, 2019. The record-holder on that one is also the Chretien governments of the early 2000s, which went a whopping 651 days between the final budget of the 36th Parliament on Feb. 28, 2000, and that first post-9/11 budget of the 37th Parliament on Dec. 12, 2001.

The current Trudeau government has a good shot at eclipsing that record, which it will do just before the New Year, on Dec. 30.

These figures, incidentally, are supplied by researchers at the Library of Parliament and include every budget and Parliament since 1867.

This extraordinarily long lapse between budgets raises important issues about how parliamentarians hold the government to account and about the very value of budgets themselves.

“The whole purpose of Parliament is to keep the government to account. And it’s primarily all about spending,” said Christopher Dummit, a Trent University history professor and creator of the podcast 1867 and All That, which chronicles the rise of responsible government in Canada. And, as Dummit explains in that podcast, legislatures going back to the 1840s would expect a government to stand or fall on two key documents — the speech from the throne delivered at the beginning of any new parliamentary session and an annual budget of the government’s spending and taxation plans.

“Governments exist or they fall, especially in a minority Parliament, by holding the confidence of Parliament about what they’re going to spend their money on,” Dummit said.

There are some key difference between the two record holders when it comes to leaving Parliament without a budget. For one thing, the Chretien governments of the early 2000s were majority governments and, as a result, were pretty much guaranteed to enjoy the confidence of a majority of MPs. The current Trudeau government, though, is in the minority and cannot expect an automatic win on confidence votes.

And yet, though it had a majority, the instinct of the Chretien cabinet in 2001, when faced with the global economic and security crisis sparked by the terrorist attacks of September 11, was to present Parliament with the spending plan it wanted to put in place in reaction to that crisis. The government of the day estimated it would need $7 billion in new spending, mostly related to security, as a result of the crisis.

“The belief was if you were going to come up with $7 billion in new, previously unauthorized spending, you will bring in a new budget in order to do that,” John Manley said in a recent interview. “It was just a very large amount in that timeframe. The choice was … let’s do a proper budget and lay it before Canadians and parliamentarians and and they can evaluate our plan.”

Manley, in 2001, was Chretien’s foreign affairs minister and was leading the co-ordination with the U.S. government to secure the common border in the wake of 9/11. The finance minister at the time was Paul Martin and that 2000 budget would be the last one Martin would present as finance minister. By the time of the next budget — 435 days later on Feb 18, 2003 — Martin had quit (or been fired, some say) as finance minister and Manley would take his place. Manley also happens to be the last individual who, like Freeland in the current government, held the dual role of finance minister and deputy prime minister.

But Manley, perhaps because of his unique experience, is prepared to give the Trudeau government some slack on the records they’re about to break when it comes to the time that has elapsed between budget presentations.

“No, I don’t think they can present a budget yet, (though) they’re getting closer to it,” Manley said. Manley said the difficulties in projecting revenue even for the next quarter, let alone the next year, would have made it difficult for Finance Canada officials to develop a realistic plan.

Still, the Trudeau government appears set to chart its way through the COVID-19 storm for the entire fiscal year, which began on April 1 and ends on March 31, without the navigational aids and potential fiscal anchors that would normally be presented in a budget.

Mind you, the government is under no legal obligation to present a budget. The House of Commons Procedure and Practice, the manual which essentially guides parliamentary life, is quite clear on this point: “Usually, the budget is presented in February or March, although the government is under no obligation to do so, or even to present an annual budget at all.”

That said, a government must put what are known as “Estimates” before Parliament that must be voted on and approved before any government has the legal authority to spend money. And generally, a government must table and win approval for what are called “Ways and Means” motions in order to raise revenue. But those documents, though they are key parts of the budget cycle, are not an actual budget. They lack the context and the broader picture that Canadians have come to expect from a budget.

The budget typically lays out the government’s view of the broader economy, potential risks to the economy and then connects all of that to the government’s current and future spending and revenue plans. In that way, budgets become crucial tools for parliamentarians and Canadians to use when considering or evaluating any estimates or ways and means motions laid before the House. Or, in the case of the current government, it would give parliamentarians the ability to assess pandemic spending versus spending on all the other things a government does.

For it’s important to remember that while the government’s current deficit of somewhere north of $343-billion is almost all related to the extraordinary spending required to manage the health crisis and economic fallout associated with COVID-19, the government is also spending yet another $250 billion or so on the things federal governments always spend money such as military procurement programs or operating the Coast Guard or making health transfers to the provincial governments or funding “supercluster” creation programs.

Is enough being spent on these items? Too much? Are there other things the federal government should spend its revenues on? Are tax rates too high? Too low? The Trudeau government appears to have decided that, this year at least, none of those basic questions need to be addressed or debated by Parliament.

“We have to be careful. We can’t just throw the financial cycle that we’ve lived with effectively since Confederation out the window because we have a virus,” Page said.

A budget also gives the country’s lenders and trading partners some idea where the country is going. And that, in Manley’s view, is very important. He worries that there was no signal in the speech from the throne about the government’s long-term plan to deal with the debt it has unavoidably incurred.

“Right now we’re in an emergency,” Manley said. “But we do need to think about how we come out of this and how we maintain and restore that reputation for fiscal responsibility. It’s very valuable.”

David Akin is the Chief Political Correspondent for Global News.

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