Economic analysis

A brief history of Canadian federal budgets

Itching for budget day on April 21? Here’s a look at the evolution of federal budgets in Canada

Lars Hagberg/CP

Lars Hagberg/CP

Itching for budget day on April 21?  Feeling anxious about heading into a new fiscal year without a budget plan to light your way?  Here’s a brief history of federal budgets in Canada:

  • A total of 187 budgetary reports have been presented by a federal minister of finance since 1867.
  • Some of these have been smaller, “mini-budgets” (as in 1967, 1971, 1977, 1982 and 1984), others were called a “financial statement” (1950, 1957,1960, 1984, 1989, 1992, 1993), an “interim budget” (1970), or a “supplementary budget” (1966).
  • Since the mid-1990s, these mini-budgetary statements have been called “economic updates” or “economic and fiscal updates.” Since 1992, there has been some secondary budgetary statement in the fall or early winter from the minister of finance, on top of their full-meal-deal budgets. The most recent was in November 2014.  But for most of our history, we’ve been pretty content to have just one federal budgetary statement a year.
  • 2011 was a banner year for budget-watchers with separate federal budgets or mini-versions in March, June and then November of the same year. No other year has ever had more.

How long do we have to wait between budgetary statements?

  • There is no requirement for the government to present a new budget in each fiscal year.  To get authority to spend money out of the consolidated revenue fund, they do need to present the estimates each year and receive the House’s approval and allocations through the business of supply.
  • The average time between budgetary statements has been 287 calendar days.
  • The period of 61 days between Nov. 27, 2008, and Jan. 27, 2009, was the shortest time between any budgetary statements. You’ll recall that was when Jim Flaherty hurried back with a much revised plan following the 2008 coalition crisis.
  • The longest stretch was 482 days between March 2, 1943, and June 27, 1944, when James Ilsley was minister in King’s government. Why the delay?  Well, there was war, you see, but that’s not the whole story. Finance was falling over itself to figure out what to do with much higher revenues than projected and a war that looked like it might finally end. They were drowning in cash and coping with the backlash against deeply unpopular taxes, some of which they cancelled in that budget.

What if we leave out the mini-budgets and updates?

  • Then the average time between full-fledged budgets is just ever so slightly more than a calendar year (365.25) at 368.6 days.
  • The longest stretch between statements doesn’t change but then the shortest inter-budgetary period shifts from 2009 back to 1914 when Borden’s government produced an April budget and then another in August immediately following the declaration of war.
  • The time between the Feb. 11, 2014, budget and the April 21, 2015, will be the longest that the Harper government has waited between its own budgets. Only once before (2009-10) has it waited more than a calendar year before tabling a new full budget.

In the House or on the road?

  • Budgets have, since 1867, always been delivered in the House of Commons. This is the opportunity for the House to hear the government’s proposed plan for revenues and expenditures and to debate it. That’s a critical part of holding the government to account for its powers to raise revenues through taxes (and fees, and investments, etc..) and to spend money through programs, transfers and tax cuts (to name but a few).
  • In the 1990s when Progressive Conservative and then Liberal governments started to double-up on the budgetary statements, they delivered both in the Chamber of the House of Commons. In 1994, Paul Martin switched it up a bit and started to deliver his fall updates to the Finance committee (save for October 2000 when he returned to the Chamber).
  • Under the Harper government, full budgets have stayed in the House but economic updates have gradually become an on-the-road event. Flaherty delivered his first update to the Finance committee (November 2006) and his second in a kind of transitional move to the National Press Theatre (October 2007).  He came back to the floor of the House in November 2008 (perhaps, if you’re going to dare the Opposition to vote a motion of no-confidence, all the better to make sure the cameras get good visuals of you looking like the government!). All the other recent economic updates (six out of 10), have been delivered to business audiences outside the House often far from Ottawa:
  • 2009: Victoria Chamber of Commerce
    2010: Mississauga Chinese Business Association
    2011: Calgary Chamber of Commerce
    2012: Fredericton Chamber of Commerce
    2013: Edmonton Chamber of Commerce
    2014: Canadian Club, Toronto

From bland to brand

  • The vast majority of the federal budgets ever tabled in the House of Commons have been pretty short and fairly dull. Until the postwar period, they were so brief that ALL of the budget documents themselves were printed in Hansard. During the wartime and immediate postwar period, the minister of finance started to use the occasion to deliver an assessment of the state of the Canadian economy. The hand-drawn charts painstakingly produced by Finance officials were about as fancy as things  got.
  • Gradually, budgets became more political and shifted away from a straight (if a little dry) financial statement from the government. Financial reporting changed so that budgeted amounts were tied to policy aims, not line items like “paper clips” or “salaries.” Budgets  also expanded in length, requiring finance ministers to table documents in addition to the basic summary table and a Ways and Means motion. By the 1960s, governments also started to promote budgets as exercises in political communication and printed the finance minister’s speech for broader distribution to media and stakeholders. By the 1970s, Finance started to produce documents with excerpts from the minister’s speech and bullet-point descriptions of budget measures to highlight the government’s priorities, all neatly organized by themes like “measures to create jobs” or “energy conservation.”
  • The 1984 federal budget was maybe the first that we’d recognize as similar to current budget packaging. Lalonde’s so-called “recovery budget” eschewed the plain vanilla covers of previous budget documents and went for some social marketing. In addition to the full budget document and the now-standard “budget-in-brief,” Finance produced a pamphlet (for voters?) that featured a happy-looking couple walking with a young child between them–all are rocking some serious early ’80s hair (picture Farah Fawcett and Burt Reynolds). Do make sure to see it on your next visit to the departmental library at Finance!
  • Under Chrétien and Martin, budgets were given distinct themes to help organize and communicate the government’s policy priorities of the day–there was a skills budget, a seniors’ budget and a health budget too. Those budgets had things in there on other policy issues of course, but having a central theme served as a filter, organizing collections of announcements into a political story for the government (and media) to tell.
  • Under the Harper government, that hastily-prepared January 2009 budget was the first to use the now signature phrase “Economic Action Plan”TM.  The government has used that same line in each of its budgetary statements ever since. Its earliest budgets were instead about “focusing on priorities,” “responsible leadership” or invitations to “aspire to a strong, better, safer Canada.” Kinda’ meh as marketing. But now, having found their EAP brand, they’ve stuck with it.  The government even developed an auditory mnemonic—you know the one. It’s the tinny-sounding three notes from the start of O Canada that you hear in all those Government of Canada ads. My 10-year-old has taken to spontaneously singing along “vo-ote-for-me!” See, advertising works.

Hope this helps tide you over to April 21.