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.