Prime Minister Mark Carney says the Liberal government will deliver a budget this fall, marking a shift in strategy following his finance minister’s suggestion four days earlier that a budget would not be issued this year.
Finance Minister François-Philippe Champagne said last week that in lieu of the budget, the government’s plan will be clear from the upcoming speech from the throne, which outlines the government’s agenda, as well as the Fall Economic Statement. This decision was criticized by the Opposition, with Conservative Party Leader Pierre Poilievre saying the government needs to present its plan clearly at a time of economic uncertainty.
Carney said on May 18 that the government will table a budget in the fall after all, but defended the decision to forgo tabling it in spring, as it is usually done, saying there is no point in rushing the process.
A new session of Parliament is set to resume on May 26, with a throne speech to be delivered on May 27, while the House of Commons will adjourn for the summer just three weeks later, Carney said.
“There is not much value in trying to rush through a budget in a very narrow window—three weeks—with a new cabinet, effectively a new finance minister just reappointed,” he said during a press conference in Rome, where leaders from across the globe have gathered to commemorate the inaugural mass of Pope Leo XIV.
“We will have a much more comprehensive, effective, ambitious, prudent budget in the fall.”
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Presenting a budget before holding in-depth discussions with the United States would be premature, Carney said.
“To have a budget before we substantially advance further our discussions with the Americans with respect to our economic partnership … [we need] greater clarity around that,” he said. “Not saying we’ll have perfect clarity, but to have greater clarity.”
The upcoming NATO summit on June 24 and 25 in The Hague, Netherlands, could also have fiscal implications for Canada, he noted. NATO is currently considering raising its defence-spending target as the United States advocates for a 5 percent GDP benchmark for member nations. Carney has committed to reaching the current 2 percent NATO target by 2030.
The government is also exploring methods to lower its expenses, another process that will impact the budget, the prime minister said.
Those three aspects combined are the reasons for the delay, Carney said, adding that he made the decision based on his experience in the financial sector. Carney is a former governor of the Bank of Canada as well as the Bank of England, and former chair of Brookfield Asset Management.
“You do these things right,” he said, referring to the federal budget. “And that’s what we’re going to do.”
He said Canadians should already have an idea about what his budgetary priorities are based on his election campaign promises, which include creating a “one Canadian economy” by eliminating trade barriers between provinces.
The Liberals’ election platform called for $129 billion in new spending over four years, from 2025–26 to 2028–29, with a focus on what it termed “nation-building” major infrastructure projects as well as different support programs.
Credit rating agency Fitch Ratings said on April 29 that the Liberals’ spending promises made during the election would “exacerbate already expanding fiscal deficits” and put pressure on Canada’s credit profile, while potentially increasing its 2025 and 2026 deficit estimates by 0.4 percent points and 0.8 percentage points of GDP respectively.
Statement Versus Budget
Carney’s comments about delaying presentation of budget to the fall come just two days prior to the meeting of G7 finance ministers and central bank governors in Kananaskis, Alta., schedule from May 20 to 22. It will be co-hosted by Bank of Canada governor Tiff Macklem and Finance Minister Champagne.
On May 14, a day after the new cabinet was sworn in, Champagne said the Liberal government would not present a budget this year, but would instead table an economic statement in the fall.
The federal government generally delivers a budget in the spring, which is a comprehensive financial plan for the upcoming fiscal year and includes both policy objectives and fiscal and economic outlooks.
A fall economic statement is a mid-year fiscal and economic update typically issued in October or November—though the 2024 Fall Economic Statement was tabled last December. The statement is meant to provide a progress report on federal finances relative to the budget, and it may also include proposals of new policy measures. A more detailed fall economic statement is often called a mini-budget.
“We’re going to be introducing ways and means motions as we enter back into Parliament. We‘ll table legislation, then there’ll be a throne speech, and then we’ll present a fall economic statement,” Champagne told reporters on May 14 following the new government’s first cabinet meeting.
Poilievre had criticized the government’s initial decision not to deliver a budget this year during a time of economic uncertainty.
“During last month’s federal election, one of Mark Carney’s most common slogans was ‘a plan beats no plan,’” he wrote in a post on social media after Champagne’s announcement.
“Conservatives wholeheartedly agree. That’s why it is so unacceptable that, today, Carney confirmed that he, in fact, has no plan and the government will not table a budget.”
He took to social media again after Carney said on May 18 that a budget would be tabled in the fall.
“A so-called budget to be tabled in the fall when half the budget year is over,” Poilievre said in a May 18 post. “In what world does this make sense?”
Matthew Horwood contributed to this report.
