Why we don’t have a debt ceiling

by Aaron Wherry

Peter Devries explains why the government no longer has to ask Parliament to borrow more money.

In the March 2007 Budget, the Government proposed to amend the FAA by removing the existing statutory limit on borrowing.  It argued that since it was again undertaking borrowings for certain major Crown Corporations, it needed increased flexibility.  This proposal was outlined on page 322 of the Budget Plan.  The proposed amendment was contained in the Budget Implementation Act 2007 Bill C-29, which received Royal Assent on June 22, 2007.  The Opposition, along with political and financial commentators, did not focus of this change.  It was not until after the fact that the Parliamentary oversight consequences were raised by the Senate but by that time it was too late.

Although the Government indicated that improved and timely information would be contained in its Debt Management Strategy and the Debt Management Report, the government no longer has to seek Parliamentary approval for its borrowing requirements. This has seriously reduced the financial oversight responsibility of Parliament. 




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Why we don’t have a debt ceiling

  1. He got the Bill # wrong – it was C-28

    367 pages. Parliament (including the Senate) had it for less than a month.

    I wonder what additional nuggets we’ve yet to discover.

    • …or he has the Bill name and number wrong, and means to refer to C-13 – the budget implementation Act 2006, which received royal assent on the date he gave.

      That one is a mere 197 substantive pages – but is part 1 of a two part implementation Bill. Parliament had that one for a little more than a month, but to be fair the May 24 break is in there.

  2. One step closer to a Harperian autocracy.

  3. Technically, it has to seek parliamentary approval during the budgeting process.  That politicians aren’t doing their job during that process, or are unable to because the CPC refuses to provide sufficient information for them to do their job, is the fault of we the people, when we continue to elect these guys.

    Besides, adding some sort of artificially legislated “debt ceiling” as we can now see from the situation in the U.S., is simply putting a gun to the economic head of the country, and trusting that our politicians can figure out how to get their fingers off the trigger in time.

    Personally, I don’t have that much faith in them.

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