Interim Parliamentary Budget Officer Jason Jacques and his predecessors have long urged the government to move up the date of the federal budget.Adrian Wyld/The Canadian Press
Interim Parliamentary Budget Officer Jason Jacques is welcoming Ottawa’s shift to fall budgets, saying it will give MPs better information as they review and approve federal spending.
But Mr. Jacques is expressing concern with the Liberal government’s new definition of capital spending, which he says is “overly expansive” and goes beyond definitions that are commonly used internationally.
Mr. Jacques made the comments through a detailed statement released by his office Tuesday. The document is described as a note that provides the PBO’s initial assessment of the new budgeting approach announced Monday by Finance Minister François-Philippe Champagne.
The minister announced that the Nov. 4 budget will mark a permanent shift to fall budgets and the fall economic statements would now be presented in the spring.
He also said this year’s budget will be the first to implement a campaign pledge to reclassify federal spending into either operational or capital spending.
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The new presentation would be in addition to, rather than replacing, the traditional way that federal finances are presented to Parliament and the broader public.
The government said capital investment will be defined broadly as any government expense or tax expenditure that contributes to public or private sector capital formation, “held directly on the government’s balance sheet or on that of a private sector entity, Indigenous community or another level of government.”
Mr. Champagne’s spokesperson, John Fragos, said in a statement to The Globe that operational expenses will be balanced by 2028-29, meaning that in three years, “the totality of the deficit will be comprised of capital expenditures.”
Essentially, the federal government is aiming to show its transfers to other governments lead to capital formation, even though such transfers do not lead to hard assets on the federal government’s books. It also wants to make the case that all deficit-financed borrowing will ultimately be spent in areas with longer-term benefits, not on day-to-day operations.
“The PBO is pleased that the government is maintaining its existing financial reporting and is committed to remain fully compliant with Public Sector Accounting Standards,” Mr. Jacques wrote in reference to Ottawa’s pledge that traditional presentations of debt and deficit figures will continue.
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As for the new presentation of spending, “we find that the scope is overly expansive and exceeds international practice such as that adopted by the United Kingdom.”
Mr. Jacques and his predecessors in the Parliamentary Budget Office have long urged the government to move up the date of the federal budget.
Members of Parliament are responsible for reviewing and approving government spending through a process called the estimates. The main estimates, which provide base funding to departments, must be tabled on or before April 16 each year.
The PBO and others have long said that presenting a budget in February or March doesn’t give departments enough time to include any new spending in the main estimates that are reviewed by MPs.
The PBO has also long called for the government to move up the release of the public accounts, which are the final official record of what was spent in a given fiscal year. They also include the final official figure for that year’s deficit.
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The federal fiscal year ends on March 31, but the public accounts are often not released until November or December.
Mr. Jacques’s note reminds the government that the PBO has called for the legally required release date to be moved up by three months, to Sept. 30, from Dec. 31.
Former PBO Kevin Page, who is now president of the Institute of Fiscal Studies and Democracy at the University of Ottawa, gave the changes a positive review.
“In the new framework, Parliament, media and Canadians will get everything we had before … plus the new changes. It will be seen as a good practice," he wrote in Policy Magazine.
Mr. Page also called on Ottawa to move up the release of the public accounts.
“A fall budget should be tabled after the public accounts are tabled for the previous fiscal year,” he said.