The only thing worse than not having a budget is having one

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There was widespread outrage when the Carney government announced it would not release a budget this spring – or even, as first envisaged, in the fall. Only after a couple of days of appalling press was it announced the regular fall economic statement would be upgraded to a full budget.

You can understand why people would be upset. As a Globe and Mail story put it, “critics say the absence of a budget will leave Canadians in the dark about the direction of federal finances.” Without a budget, it is impossible to know how each individual item of spending or taxing fits into the government’s overall fiscal plan, or what the government’s priorities are, or how it makes choices between them.

Without a budget, what is more, MPs are deprived of the information they need to exercise their historic role of holding the government to account, especially with regard to raising and spending the public’s money.

There’s just one further point I should probably mention: All of these things would be just as true with a budget as without. Certainly the government should have brought in a budget this spring. But let us not be under any illusion that this would have left the public any more enlightened about the direction of federal finances, or Parliament any more in control of the public purse. It has been a long time since budgets actually served either function.

Once, it is true, budgets were fairly straightforward accounts of the state of the public books, together with an update on the government’s spending and taxation plans for the coming year. As late as the 1980s, federal budgets were still relatively brief – between 20,000 and 40,000 words – as they remain in other parliamentary democracies.

Since then they have ballooned to four or five times that size – hundreds and hundreds of pages of propaganda, mixed with accounting tricks, the whole expressly designed to mystify the public.

The air of confusion is compounded by the government’s habit of periodically changing accounting systems – gross vs. net, cash vs. accrual, inclusive of public-sector pension liabilities or exclusive of them – in a way that makes interyear comparisons virtually impossible. The pending split between capital and operating spending will add to this rich litany of bafflement.

MPs are scarcely further ahead. Ostensibly the budget is supposed to provide the overall fiscal plan, while the estimates fill in the details. Except most years the estimates are released well before the budget, making it difficult to make sense of either. And just to make things extra spicy, the two are expressed in different accounting terms (the estimates are still on a modified cash basis, while since 2001 budgets have used full accrual accounting).

All of which would be troubling enough, were the projections in the budgets worth the paper they are written on. It used to be that governments would torture the economic forecasts to produce scenarios to their liking. That has not been possible of late, since they started basing these on a survey of outside economists. So now they just lie about spending. Never mind projections of spending in future years – even current-year projections regularly turn out to have understated the government’s actual spending plans to the tune of tens of billions of dollars.

But then, MPs aren’t even asked to vote on budgets as such. Rather, year after year they are presented with mammoth, 700- or 800-page omnibus bills, containing not just the budget but the government’s entire legislative agenda – dozens of bills, in reality, covering a vast array of different subject matters – which they are nonetheless obliged to assess and vote on as a single package.

You want to know how we got into the fiscal mess we are in? That’s how we got into the fiscal mess we are in. Parliament has simply lost control of public spending.

Of course, even if Parliament were to regain control, it would not make a great deal of difference. You could have the cleanest budgets anyone could wish for, the figures rendered with impeccable clarity, the projections ratified by a team of forensic accountants, the legislation shorn of any extraneous items, and we’d still be drowning in debt – so long as the government of the day preferred to spend more than it took in, and so long as government MPs refused to hold them to account, voting with them, as they do now, 99.9 per cent of the time.

So yes, by all means, take the Carney government to task for being so slow to produce a budget. But let us not pretend that a budget, on its own, would solve much of anything.