Canada’s Liberal government is under increasing fire for a series of major spending announcements outside the country’s usual budget process, with economists and opposition politicians raising the alarm about transparency and the long-term impact on public finances.
Since releasing its Spring Economic Statement in April, the federal government has announced billions of dollars in new funding commitments, saying the current global economic environment requires more immediate action than the normal budget cycle allows.
“The government has announced more than $40 billion in incremental spending over the coming decade since the April fiscal update,” said Randall Bartlett, Deputy Chief Economist at Desjardins. His assessment was published on 16 July and was completed before several more recent announcements so the overall figure could now be even higher.
Bartlett said many of these initiatives lack detail about timelines for implementation, funding allocations and how costs will be shared among the federal government, provinces, Crown corporations and the private sector.
The lack of information raises legitimate questions about how transparent federal spending commitments are,” he said. “Canadians are unlikely to get a full sense of the impact on the country’s finances until the federal government tables its fall budget.
John Fragos, a spokesperson for Finance Minister François-Philippe Champagne, would not comment on Bartlett’s calculations but defended the government’s fiscal reporting practices in response to the criticism. He said the fall budget and Spring Economic Statement both contain detailed spending plans, as well as measures to save $60 billion thru cost reductions across the federal public service over the coming years.
“Fragos said the government is totally transparent and said Ottawa has always been providing detailed spending data and long-term fiscal projections.
Bartlett believes seven of the ten recent spending announcements were probably already included in previous fiscal planning documents. But he said there’s little evidence in published budget documents of other initiatives, such as Canada’s new artificial intelligence strategy and the proposal to publicly finance the construction of an oil pipeline to the British Columbia coast.
He also warned that if these new commitments are fully factored into future fiscal plans, Canada’s federal debt-to-GDP ratio could be almost one percentage point higher by 2035 than projected in the Spring Economic Statement.
The Liberal government insists its fiscal strategy is sustainable and its aim is to keep the deficit-to-GDP ratio on a downward track, while balancing the government’s operating budget by 2028-2029.
Criticism has also come from the opposition. Conservative finance critic Michael Chong said the Liberal government is one of the least transparent governments Ottawa has seen in decades. Instead, he said, tens of billions of dollars in new spending should be brought before Parliament for review by MPs and the Parliamentary Budget Officer, not announced outside the regular budget process.
Fragos defended the government’s approach, saying the speed of global economic uncertainty requires quick policy decisions that do not always have time to wait until Parliament is in session. Ottawa’s new capital budget framework is meant to give Canadians a better sense of how public funds are being spent to drive economic growth and jobs, he said.
But the Office of the Parliamentary Budget Officer has previously raised concerns about the framework, saying it doesn’t clearly distinguish between capital spending and operating expenditures.
Former parliamentary budget officer Kevin Page says there is nothing wrong with making funding announcements between fiscal updates — especially when governments may need to ramp up spending during times of heightened economic uncertainty. But he insisted this approach had to be complemented by stronger transparency measures.
Page proposed that the federal government provide a monthly or quarterly fiscal monitor that would summarize all new policy announcements, the costs associated with them and their effect on Canada’s budget balance. Greater fiscal transparency would also improve the government’s financial credibility and give Canadians a better sense of how public money is being managed, he said.
