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The Canadian federal budget is presented annually by the Government of Canada to identify planned government spending and expected government revenue, and to forecast economic conditions for the upcoming fiscal year. Federal budgets are presented in the fall by the minister of finance. Before 2025, federal budgets were released in the spring.
The budget is announced in the House of Commons by the minister of finance, who traditionally wears new shoes while doing so.[1] The budget is then voted on by the House of Commons. Budgets are a confidence measure, and if the House votes against it the government can fall, as happened to Prime MinisterJoe Clark's government in 1980. The governing party strictly enforces party discipline, usually expelling from the party caucus any government member of Parliament (MP) who votes against the budget. Opposition parties almost always vote against the budget. In cases of minority government, the government has normally had to include major concessions to one of the smaller parties to ensure passage of the budget.
Historically the Official Opposition used to prepare a complete alternative budget and present it along with the main budget. In recent years, opposition parties are more likely to pick only certain aspects to criticize. The Reform Party revived this practice for a time, however. A complete alternative budget is today produced each year by the Canadian Centre for Policy Alternatives, a non-partisan think-tank.
Traditionally, the budget process was immensely secretive with little consultation. Under Prime Minister Louis St. Laurent, the minister of finance famously would type the entire budget himself so that no secretary could read it. This secrecy was felt to be needed for inside information could enable individuals to profit from upcoming government decisions. The secrecy also had a large political component, as it would help undermine the response by the opposition.
Under Prime Minister Jean Chrétien and his Finance Minister Paul Martin, this changed considerably. Most of the budget would be released well before its announcement, especially any major changes so as to get feedback from the populace and the market.
The process of creating the budget is a complex one which begins within the working ranks for the federal government. Each year, the various departments that make up the government submit what are called 'Main Estimates' to the Treasury Board of Canada Secretariat (TBS). These documents identify the planned expenditure of each department, linking these proposed expenses to programs, to objectives and ultimately to the priorities of the current ruling government. TBS combines these budget estimates and compiles an initial proposed budget. From there, Cabinet and the Prime Minister's Office adjust the budget based on a series of economic, social and political factors. In reality, decisions are usually made with the primary intent of re-election and so often include advantages for key regions and lobby groups.
Following the budget, Parliament will pass an appropriation act (called the interim supply) which will allow individual departments to spend 3/12th of their annual budget. This partial authority enables Parliament to spend more time in examining the Estimates documents. In June, Parliament appropriates the full supply. Under Prime Minister Mark Carney, budgets began being tabled in the fall, with an economic statement in the spring.[2]
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