Financial procedure in the Canadian parliament

Part of a series of posts on financial procedure:
British Parliament
Federal Canadian Parliament
Australian Commonwealth Parliament
New Zealand Parliament

In Canada, the federal budget was unveiled a few weeks ago. But financial procedure in Canada isn’t very clear or understandable, similar to most parliaments! The federal Parliament divides each year into three ‘supply periods’ for the purpose of ensuring supply is considered in a timely and ordered way.

The beginning of the financial year is prepared for by the Commons passing a motion of interim supply while introducing and passing in one day an appropriation bill. This allows the government to spend a up to certain amount of money in the next financial year until the main estimates are approved, usually in June. It is passed without much debate, though with the opposition forcing many votes on the issue. This is just to ensure that the government doesn’t stop running until parliament approves the government’s full spending plans.

The main estimates are then tabled on or before the 1st of March, and each department’s estimates are referred to their respective standing committee. The estimates consist, quite simply, of a limit on amount of money each government department and the agencies, boards and commissions which sit under them can spend for the next financial year which starts on the 1st of April. Committees generally examine the estimates and hear from departmental officials, with the budget for each of those bodies either approved, reduced*, or rejected. The estimates can then be referred back to the House.

The next step is the budget implementation bill, sometime around March, which specifies how the government will raise the money it spends during the next financial year. The Minister of Finance will make his budget presentation, setting out his general budgetary policy. Up to four days of debate is then scheduled, with Ways and Means motions implementing tax changes voted on after the debate has finished. These are simply temporary measures which last until the budget implementation bill receives Royal Assent.

The budget implementation bill then undergoes second reading in the days following the budget debate and is committed to the Standing Committee on Finance. The committee will examine the bill, usually hearing from many experts and public servants and sometimes from the minister. The bill will then proceed to report stage and third reading soon after.

In the Senate, the bill can undergo pre-study by the Standing Committee on National Finance – to speed the whole process up, the Senate committee hears evidence and forms an opinion of the bill while it’s still in the House of Commons, meaning the government can change the bill in the Commons rather than waiting for the Senate to officially take a view – this is, however, unusual. It then proceeds through second reading, being referred to the Standing Committee on National Finance**, report if it has been amended and then third reading. Usually, this bill’s passage will take two or three months all-in-all.

Throughout the financial year, there are some supply days which are actually days where the opposition chooses motions for debate. They have nothing to do with the actual process of supplying the government with money! They are, however, an important part of the process whereby the government can only have its last appropriation bill once the House has debated opposition motions – echoing back to the days when supply was conditional on resolving the grievances of (some of) the people.

By the 31st of May, any estimates not already referred back to the House by committees are automatically deemed reported back without objection, rather weakening the idea of committees scrutinising the estimates in the first place. The House then considers the main estimates and approves them, usually without too much debate. Once this is done, an Appropriation Bill is introduced to authorise the government to spend money up to the amount in those estimates in that financial year. Again, this goes through with little debate in both the House and the Senate because most of the work has already been done on the estimates.

Throughout the year, any member (nearly always a government member) will get up and say they have received the Royal Recommendation and introduce a bill which will authorise spending on something not covered by the estimates or impose a tax not covered by the finance bill. These go through the normal parliamentary process with the proviso that they can’t be introduced in the Senate and must have a Ways and Means resolution too.

As the year progresses the government will table supplementary estimates in each supply period. Commons Standing Committees again will generally hear evidence, examine  and vote on them, but even if they don’t they will be automatically reported to the House a few days before the end of the supply period and voted on in the chamber.  The last set is usually debated on the same supply day as the interim supply.

If the government exceeds its limits as set out in the estimates, it may need to request the authority to borrow money from parliament by passing a Supplementary Borrowing Authority Bill which follows the usual parliamentary procedure, although it is limited to two days debate during second reading.

*Not, of course, to an amount below the interim supply already has provided for it!
**Yes, even if the committee already looked at it during ‘pre-study’ – the committee simply would nod through the bill or vote on amending it if the government chose not to follow its recommendations without hearing evidence on it.

<em>Part of a series of posts on financial procedure:British Parliament<a href=””>Federal Canadian Parliament</a><a href=””>Australian Commonwealth Parliament</a>New Zealand Parliament</em>

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