Ottawa shifts budgets to the fall as minister defends new fiscal focus

The upcoming Nov. 4 budget will be the first tabled on the new schedule. The typically shorter economic and fiscal updates will now come in the spring, closer to the start of the fiscal year on April 1.

Questioned by reporters Monday, Champagne argued this shift will offer the “clarity” departments, businesses and policy-makers need to plan better for upcoming fiscal years.

The budget will now be tabled months ahead of when the government issues the main estimates — a roundup of departments’ annual spending that must be tabled by March 1 each year. Champagne said that will give parliamentarians more time to review fiscal plans before voting on them.

He also argued it would help builders chart out the spring construction season.

Future budget consultations will now take place over the summer months, as they did this year.

The Liberals are also planning to split operating and capital spending in the upcoming budget — part of Prime Minister Mark Carney’s promise to balance operating deficits within three years.

Canada’s business investment has stalled since 2015, falling well behind sharp growth in the United States and leaving the Canadian economy “less resilient,” in the government’s own words.

That’s a trend Ottawa says it wants to reverse with a new focus on capital spending in the upcoming budget.

Direct investments in infrastructure, housing and some non-physical assets such as intellectual property will be classified as capital, as will any spending or transfers that stimulate such investments from the private sector, Indigenous communities or other levels of government.

The federal government says it will use two criteria to decide whether spending counts as capital: whether the funding is conditional on the recipient investing in capital formation and whether the spending encourages or enables capital investment in specific sectors or projects.

Anything that’s not considered capital will fit into the government’s operating budget. Day-to-day program spending and transfers to Canadians and provinces not tied to capital investments will be considered operational.

The Liberals are pledging that by the time the 2028-29 federal budget is tabled, the annual deficit — what Ottawa is borrowing to fund its spending in a year — will be comprised solely of capital investments and all operational spending will be covered by revenues coming into the government.

Champagne argued in an interview with The Canadian Press last month that borrowing to invest in Canada’s productive capacity is a prudent path forward. He said the federal government expects returns from its capital investments to help pay down the deficit in future years.

Interim Parliamentary Budget Officer Jason Jacques estimated last month the total federal deficit would balloon to $68.5 billion this fiscal year, up from $51.7 billion last year. He also warned that the federal government’s debt-to-GDP ratio — previously a key fiscal anchor for the Liberals — might no longer be on a declining path over the medium term.

Champagne appeared at the House of Commons finance committee on Monday, where members grilled him over Jacques’ claim that the current pace of government spending is “unsustainable.”

Conservative MPs accused the Liberals of covering up the government’s real fiscal position.

“Debt is still debt at the end of the day,” said Conservative finance critic and committee vice-chair Jasraj Singh Hallan. “It doesn’t matter how many columns you try to put in front of Canadians to try and trick them.”

Champagne called the Conservatives’ arguments “irresponsible.”

He argued the split between capital and operating is a new “lens” on government finances that will augment — not replace — traditional accounting metrics tracking Ottawa’s revenues, debts and deficits in the budget.

“The capital budgeting framework is to provide more clarity, more transparency,” Champagne said Monday. “It’s an additional lens. It’s not replacing anything.”

Jean-Denis Garon, Bloc Québécois MP and finance committee vice-chair, said he is not satisfied with the federal government’s new fall budget schedule.

Garon told reporters after Champagne’s appearance that the finance minister has been in his role since Carney took office in March and has had ample opportunity to table a fiscal update.

“What the minister tells us is that he’s been doing things so wrong that he needs to change the rules, and I think that’s not acceptable at the moment,” he said.

Garon said he would prefer to stick to the spring timeline, which allows provinces and parliamentarians to align their plans with a federal budget tabled near the start of the fiscal year.

This report by The Canadian Press was first published Oct. 6, 2025.