GR professionals would benefit from sharing with clients this inconvenient truth: the Federal Budget guarantees….very little

Published on
March 31, 2023
Written by
Matt Hutchinson
Read time
4 min

Matt Hutchinson

Team Lead, Knowledge Product

In 1215, King John of England signed the Magna Carta, which introduced the idea that the Crown would not have unlimited power over taxation and spending. Today, this principle is upheld through an intricate system of rules and procedures that govern the appropriation cycle which, at its core, is designed to ensure that public funds are distributed and spent transparently and accountably.

The appropriation cycle therefore plays a crucial role in Canadian democracy, yet it is commonly misunderstood by the public. This is mainly because the budget is widely perceived as the primary instrument for authorizing government spending, when in actuality, passing the budget in Parliament is merely the initial step in a long process of scrutiny and sanction that must be completed before funds can be released for their intended purposes. The Auditor General makes efforts to outline the nuanced process for parliamentarians to understand, but its layout is difficult for those in the government to precisely understand, let along members of the general public

Indeed, every year, expectations – from industries and sectors, municipalities and regions, organizations, and indeed individuals – are created solely on the basis of the budget’s approval, leading to disillusionment when promised measures are not implemented on schedule or at all. This is because the budget is, above all, a financial plan and does not provide authorization to spend funds; it is the main estimates that contain the detailed breakdown of spending initiatives and, most crucially, the authorization for government to allocate funds across those plans. What is more, even after the main estimates are approved in Parliament, there are further reviews and approvals that need to be completed before the funds can be made available for use.

For instance, departments and agencies must present their spending plans to the Treasury Board, detailing how the funds will be used to achieve specific objectives and outcomes. Only once these plans are approved by Treasury Board can those funds be released for their intended purposes. Additionally, and even less widely understood, in some cases, Cabinet authorization may be necessary before departments and agencies can even commence seeking the approval of Treasury Board, particularly when proposing new spending initiatives that are beyond their existing mandate.

By possessing a comprehensive understanding of the appropriation cycle, professionals in government affairs and related fields can offer more informed guidance on the prospects and difficulties presented by the budget, as well as the probability and timetable of specific measures being implemented. This begins with recognizing that funds are not automatically available for expenditure after the budget is passed in parliament or the main estimates are approved.

The budget is just one step on the journey towards new program spending, with few guarantees. Much work remains to be done before the money ever leaves federal coffers.

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