The Liberals aren’t tabling a budget. How does that affect the economy — and your wallet?

The decision by the recently re-elected Liberal government to forego presenting a budget this year has raised concerns among experts about the potential negative impact on economic confidence and the government’s agenda. While Finance Minister François-Philippe Champagne has indicated that an economic statement will be released in the fall instead, experts warn that not providing a fiscal snapshot could lead to uncertainty and delays in the government’s plans.

Typically, a federal budget is a crucial legislative piece that provides an update on the country’s financial health and outlines spending priorities. However, with Parliament being prorogued in January and the election campaign starting in March, a 2025 budget has not been presented yet. Champagne cited ongoing economic uncertainty, particularly due to the U.S. trade war, as one of the reasons for delaying the budget until the fall.

Former parliamentary budget officer Kevin Page expressed concerns about the government’s decision, stating that a fiscal plan is essential to address uncertainty and provide a clear financial picture to Canadians. He emphasized that the economy is weaker now, and the deficit will likely be higher, making it crucial for the government to present updated financial projections.

Rebekah Young, an economist at Scotiabank, highlighted the importance of the government showing its economic projections and readiness to address any adverse developments. With markets seeking signals and provinces already outlining ranges of uncertainty in their assumptions, the lack of a clear fiscal plan could result in decreased confidence, particularly in the bond market.

Despite the tight timeline for passing a full budget before the House rises in June, experts believe that the government could provide a fiscal snapshot this spring and table a comprehensive budget in October. Former prime minister Stephen Harper’s government managed to present a budget in June 2011 after an early May election by having a similar document ready beforehand.

While an economic statement in the fall may provide some insights into the government’s finances and economic outlook, experts argue that a full budget is necessary to communicate the government’s fiscal priorities effectively. Without a budget, new spending items promised during the campaign may be rolled out at a slower pace, potentially delaying the implementation of the Liberal agenda.

In conclusion, while the decision to delay the budget may have been influenced by economic uncertainty, experts caution that not providing a fiscal snapshot could erode confidence and create further uncertainty. It remains to be seen how the government will navigate the challenges and ensure that its economic and fiscal plans are effectively communicated to Canadians.