Carney won't reveal spending plans, enraging critics — but some call it savvy

National Observer

5 days ago

The West Block of Parliament is a great place to hide. A labyrinth of hallways and alcoves, committee rooms and stairways, it's the architectural expression of Ottawa's sprawling bureaucracy. At the heart of the maze is the House of Commons, a cavernous room where parliament sits while the years-long renovation of their original seat in Centre Block, next door, is completed. Until then, West Block is where Question Period takes place – but even here, perhaps especially here, answers are hard to find.
Canadians were reminded of that as Question Period resumed on Wednesday, with Prime Minister Carney in the hot seat for his debut performance. The viewing gallery was packed; prominent journalists, the mayor of Toronto, PEI's premier, senators and family members of parliamentarians all came to watch the show. The day's Big Question was why Mr. Carney won't release a federal budget before fall. By then it will have been over a year since the government released one, an unprecedented gap (outside of 2020, when Covid derailed the process).
Interim Conservative leader Andrew Scheer and others in his party asked the budget question repeatedly. In lieu of an answer, Carney – perfectly at ease as he lobbed jokes and jabs across the aisle – pointed out that Pierre Polievre's 100-day plan announced during the election hadn't included a budget either. From there on, he and his finance minister, François-Philippe Champagne, took turns repeating the great news that they were delivering a tax cut and breaking down provincial trade barriers.
Disappointing for those hoping for answers, but not surprising. Question Period is for sound bites and sick burns, not genuine replies. For those, you have to go outside. In this case, all the way to Rome – it was there, during his visit to greet the new Pope, that Mr. Carney gave reporters the closest thing he's given to an explanation for skipping the spring budget.
'There's not much value in trying to rush through a budget in a very narrow window — three weeks — with a new cabinet [and] effectively a new finance minister," he said. "We will have a much more comprehensive, effective, ambitious, prudent budget in the fall."
He elaborated briefly this week, in an interview with Power and Politics on the afternoon of the Throne Speech. 'I'm not a fan of picking an arbitrary number and then figuring out how to spend up to it,' he told host David Cochrane, after describing a host of uncertainties looming over Canada's defence budget. 'That's one of the reasons we will have a fall budget, not a budget tomorrow.'
These excuses rang hollow to NDP MP Heather McPherson.
In light of the intense furor caused by the budget's delay, it's baffling why Carney invited such a storm. It didn't just dominate the first week of Question Period, it unleashed a predictable slew of withering news articles and op-eds.
'For him to constantly say that everyone is new — nobody's buying that,' McPherson told Canada's National Observer over the phone this week. 'This is literally [the Liberals'] fourth mandate, with many of the same caucus members, with almost the entirety of the financial department staff being the same.'
The day after Carney's first Question Period, finance minister Champagne told Politico that the reason Liberals are waiting until fall is they want to have 'more clarity around defense, around the trade war that is happening now in the world,' referring to tariffs and the upcoming NATO meeting where Canada's defence budget is almost certain to rise dramatically. Champagne said the government is also waiting to get 'initial feedback from our initiatives on government efficiency.'
McPherson didn't buy that either. 'For Mark Carney to say, 'we don't know what's going to happen with military spending' – well, you ran on a military spending plan. Is that not the military spending plan that you are now going to take to NATO?' Uncertainty is baked into the whole budgeting process, she said; it's why spring budgets are followed and adjusted by fall economic forecasts. 'There'll be changes in a lot of things. There's going to be changes next year. Do we not get a budget next year because there might be changes? That's not how budgets work, and he knows that.'
Indeed, he does. A central irony to all this is that the most famous banker in Canadian history seems indifferent to the value of a timely budget. This begs a question no one asked in Question Period: Why do we need a budget now?
Big, beautiful budgets
According to Michael Wernick, the former Clerk of the Privy Council, deputy minister under three prime ministers, and one of the most experienced former bureaucrats in Canada, we don't.
'In practical or operational terms, the four-month delay really doesn't matter,' Wernick told Canada's National Observer in a phone interview.
'In days gone by, the budget was mostly a statement of tax measures,' he said. 'The practice of having a big, beautiful budget, chock full of just about everything the government wants to do in the coming year and hundreds of pages of implementation legislation covering everything from A to Z, is a fairly recent practice.'
The day-to-day business of a government doesn't depend on a budget. Payments to civil servants, transfers to provinces, funding the various ministries and departments — all these costs go out more or less automatically. It's the new spending measures that require parliamentary approval. One example is the 1 per cent tax cut Carney has promised to Canadians in the lowest income bracket; that can only come into effect once parliament has voted for it. The same goes for increasing the defence budget, or deploying billions for new housing, and so on.
Over the past two decades, Wernick explained, governments of both parties have tended to jam their entire year's goals into a single budget. 'So you've got these huge omnibus bills and a fight with parliament,' he said. 'But they're too big and they cover too many things and they're cramping parliament's ability to properly review them. The Conservatives criticize the Liberals for doing it. The Liberals criticized the Conservatives for doing it.'
Those giant omnibus budget bills force parliament to either approve or reject everything at once. On top of that, rejecting a budget automatically brings down the government, forcing a brand new election – something no party, or Canadian, wants right now, regardless of how they feel about the budget.
For that reason 'Breaking [the budget] up into pieces might actually lead to better scrutiny by parliament,' Wernick says. Rather than an all-or-nothing vote with the sword of a new election hanging over their decision, MPs of all parties can (for now) approve, reject or amend each spending measure on its own merits, one at a time.
Not everyone agrees, of course.
'The history of accountability and democracy is really coterminous with control of the budgets over the executive branch,' says Ian Lee, an associate professor in the Spratt School of Business at Carleton University (and a onetime candidate for MP under Kim Campbell's Progressive Conservative banner). 'It's not the end of the world if a national government doesn't table its budget, but it reduces transparency; it reduces, to a small degree, confidence in the government and in the stability of that country.'
'It's about legitimacy,' agrees Christopher Ragan, founding director of the Max Bell School of Public Policy who currently teaches economics at McGill. 'I mean, if you really want a well-informed debate about spending, especially in the world of a minority government, we should probably know what the books look like. And we don't know what the books look like. The last time we saw a fiscal update was in December, and that was like a whole lifetime ago.'
Uncertain times on the barbecue circuit
December was before Trump's inauguration and the ensuing trade war; before Justin Trudeau stepped down; before it became clear that Canada's economic future would bear little resemblance to its recent past. That's another crucial aspect of a budget – by spelling out the state of a nation's finances, it forms the material basis for debate about how the government will spend taxpayer's dollars.
But here, too, Michael Wernick feels a budget's importance is overstated. 'The Department of Finance puts out something called the fiscal monitor every month,' he points out. 'Nobody ever pays attention to it and writes articles about it, but they're obliged to put out quarterly financial statements. So every three months the department will put a snapshot out of where it is.' But what if MPs want more recent or granular information, especially given the tremendous rate of change?
'If parliament wants to hear from the minister of finance, it's a minority parliament; they just call him in front of the finance committee,' Wernick said.
Still, in light of the intense furor caused by the budget's delay, it's baffling why Carney invited such a storm. It didn't just dominate the first week of Question Period, it unleashed a slew of withering news articles and op-eds that articulated valid concerns about Carney's lack of transparency, all of it entirely predictable. The work of crafting a budget is contained within the finance department — completing one doesn't hamper the rest of the government's ability to pursue Carney's ambitious agenda — so why not just release one before summer and avoid the bad press?
'The charitable interpretation is they say, 'Hey, we're busy, life is uncertain, it's too hard to do, so we're gonna do it later,'' says Christopher Ragan. 'But the thing that I fear is that what's going on in their heads is: 'We can just do this more easily without a budget. The budget is complicated, the budget is very visible, the budget invites all kinds of analysis and criticism, and why don't we just proceed as much as we can and we'll just pass these appropriations bills, which get way less scrutiny.' And that is a view that is fairly disrespectful of the whole concept of parliament.'
Heather McPherson says she expects the budget to contain bad news — news the Liberals would rather avoid delivering before they fan out across the country to gladhand their constituents.
'I think the advantage for them is they don't want to have a bad budget that they have to go out on the barbecue scene with,' was Heather McPherson's take. 'They don't want to have to go to Canadians with a budget that's going to be a hard pill to swallow, and stand at the [Calgary] Stampede and have to go to Canadians across the country all summer long with a bad budget. So they're going to hide and they're going to pretend everything is still sunny ways.'
'I think his intent, his strategic objective, is to buy himself a little bit of time,' says Ian Lee. 'There's going to be a logjam this September, October, November in parliament because there's going to be so many bills tabled in Parliament to implement his agenda. And so this will buy them four or five months to figure out, you know, which gets priority?'
Of all the people Canada's National Observer spoke to, Lee was among the most critical of Carney's decision to delay the budget; Lee has worked in several developing nations around the world over the course of his career, and he pointed out that one hallmark of those governments is a slipshod approach to crafting budgets. But even he acknowledged that 'if [Carney] comes up with a really good, transparent budget this fall, I don't think everyone's even going to remember that they kicked the problem down the road.'
Michael Wernick, for his part, takes what Carney said in Rome, and what Champagne told Politico, at face value. 'They must have just calculated that with all of the chaos around Trump's tariffs, and the NATO summit coming in June, which could just blow a big hole in sorts of all future forecasting, then, the shelf life of a June budget would be days or weeks.'
My query to the PMO also directed me to Carney's Rome statement. 'I think that would be your best bet for a concise quote from him,' a press secretary told me.
In the absence of more elaborate communication from the PMO on all this, Canadians must rely on the speculation of outside experts. And for voters and government alike, that lack of transparency may prove to be a bigger problem than the lack of a budget – especially if it becomes the new story by fall.