The Liberals aren't tabling a budget. How does that affect the economy — and your wallet?

Yahoo

17-05-2025

The recently re-elected Liberal government isn't planning to release a budget this year, opting instead for an economic statement later this fall. But experts warn that not providing a fiscal snapshot could erode economic confidence and delay the government's agenda.
A federal budget is one of the most significant legislative pieces a government can put forward. It provides an update on the health of the nation's coffers and outlines the government's spending priorities.
Typically the budget is tabled in March or April and passed before the House rises in June. But a 2025 budget hasn't been put forward yet since Parliament was prorogued in January and the election campaign began in March.
Finance Minister François-Philippe Champagne indicated Wednesday that the government isn't planning on tabling a late spring budget, and will instead opt to release a "substantive" economic statement later this fall.
Champagne cited ongoing economic uncertainty — due in large part to the U.S. trade war — as one of the reasons the government won't pass a budget before June.
"Hopefully by [fall] there'll be less uncertainty that we need to factor into … I want to be straight with Canadians and give them the best possible [financial and economic] picture that I can," Champagne said in an interview with CBC's Power & Politics.
Champagne also argued most of the government's spending priorities were laid out in the Liberals' election platform.
WATCH | Champagne defends delaying budget:
But Kevin Page, a former parliamentary budget officer and head of the Institute for Fiscal Studies and Democracy at the University of Ottawa, told Power & Politics that "the reason you have a fiscal plan is to deal with the uncertainty."
"The party platform that the Liberals produced was based on a set of assumptions that would no longer hold. The economy is much weaker now, the deficit will be much higher," Page told host David Cochrane.
"I don't think it's a strong argument. I understand the argument more in terms of compressed timelines."
Budgets are more than just a fiscal document. In many ways, they are also communications documents and a way for the government to signal where it anticipates the economy is headed.
WATCH | Former PBO on delayed budget:
Rebekah Young, an economist at Scotiabank, argued it's important for the government to show its economic projections and what it's prepared to offer if things take a turn for the worse.
"Markets are looking for those sorts of signals and now what we've seen provinces do is put ranges of uncertainty around their assumptions so at least they know roughly where those guardrails are," she told Power & Politics.
"The big question mark is: if things are a lot worse … the government is likely going to have to deliver additional programs beyond what they've already talked about."
In trying to account for uncertainty, the government could be creating more — specifically in the bond market. Government bonds are used to raise funds and often make up a significant portion of individual savings portfolios.
Without a clear picture of the government's finances, Page said people will have less confidence in buying government bonds.
"The bond rating agencies, they're not going to like the fact that the government is not producing this type of financial document updating Parliament, updating Canadians, on the fiscal position," Page said.
During the campaign, the Liberals promised $130 billion in new measures to boost the economy and transition the country through the trade war.
The House returns at the end of May and is scheduled to rise for the summer before the end of June. That leaves little time for the Liberals to put forward a substantive budget.
Former prime minister Stephen Harper's government tabled a budget in June 2011 despite that year's election taking place in early May. But the Conservatives largely had the budget ready beforehand, having tabled a similar document in March before the campaign.
Page said he thinks it would be realistic for the government to provide a fiscal snapshot this spring and then table a full budget in October.
WATCH | No Liberal budget in 2025 'extremely unusual,' Poilievre says:
An economic statement, which is typically tabled in the fall, is different from a full budget. They can be used just to provide a snapshot of the government's finances and economic projections but they are sometimes considered a sort of mini-budget if new spending is included.
The Liberal government was able to turn around an economic update in November 2015, roughly a month after taking office.
"It's not sustainable for the finance minister not to put out some sort of economic and fiscal document, even if it's just the outlook, which would include the fiscal position of the government as Parliament makes these these changes to the tax act," Page said, referencing the promised tax cut the Liberals are aiming to pass by Canada Day.
Even if the government doesn't table a budget, it doesn't mean current federal programs are at risk of running out of money.
Budgets are required to outline any new spending the government wants to propose. But funding for ongoing programs is typically approved through different Parliamentary measures, namely the government's spending estimates.
Governments are required to table main estimates once a year and supplementary estimates three times throughout the year while the House is sitting.
During an election campaign, the government can use a measure known as special warrants to keep the lights on. In May, such a special warrant was issued and will cover operating costs until June. But the Liberals will need to present its spending estimates to cover costs past that point.
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The main estimates are meant to be passed every March, but haven't yet been tabled this year because the House hasn't been sitting. The next deadline for the supplementary estimates to pass is June.
But without a budget to outline the government's overarching fiscal priorities, spending on new items they promised during the campaign might be rolled out at a slower pace.
"You can't implement what they've said they were going to implement without a budget … the clock is ticking," Page said, arguing that the bulk of the Liberal agenda might not get underway until 2026 or 2027.
Young said smaller pieces of legislation will be required until the full fiscal outlook is laid out.
"I expect we're going to see legislation coming forward one at a time," she said.
"I think they'll move forward piecemeal until we get to the fall where we get to see the bigger picture."