Question Period Note: Modernization of Budgeting Approach

How will the shift to a Fall budget and the new Capital Budgeting Framework address concerns from the PBO and OGGO Committee about the disconnect between the federal budget and Main Estimates, and improve Parliamentarians' ability to scrutinize spending?

• The Government is committed to providing Parliamentarians and Canadians with useful, timely information about its use of public funds.
• The Capital Budgeting Framework will allow Parliamentarians and Canadians to clearly see the day-to-day cost of running government versus the long-term investments being made to strengthen Canada.
• The consolidated financial statements of the Government of Canada will remain fully compliant with Public Sector Accounting Standards.
• Moving to a Fall Budget schedule allows more Budget investments to be reflected in the Main Estimates.
• This change gives Parliamentarians a clearer view of planned spending before the fiscal year begins and will provide departments with the opportunity to receive approved funds earlier in the year.

On October 6, 2025, the Minister of Finance announced changes to the federal budget to enhance financial reporting, predictability and alignment with the Main Estimates.
Capital Budgeting Framework
The Government will introduce a new Capital Budgeting Framework. By distinguishing day-to-day operational spending from capital investment, this new framework will guide decisions and help prioritize investments that generate long-term benefits for Canadians, such as major projects, housing, clean energy, and infrastructure that will help grow our economy and attract private investments. The new framework will enhance—not replace—existing financial reporting. The Public Accounts of Canada will remain fully compliant with Public Sector Accounting Standards.
Under the new Capital Budgeting Framework, capital investment is defined broadly as any government expense or tax expenditure that contributes to public or private sector capital formation, held directly on the government’s balance sheet or on that of a private sector entity, Indigenous community or another level of government.
Spending that is not categorized as capital investment would be considered day-to-day operating spending. This will include major government expenditures like transfers to persons, health and social transfers, and the costs of running government operations and services, including salaries and benefits.
Budget timing
Starting with Budget 2025, the federal budget will be tabled in the fall, with an economic and fiscal update released in the spring. Having a budget in the fall—well ahead of the new fiscal year—will mean:
• Greater predictability and better planning for organizations, businesses, provincial and territorial budget planners, and Canadians.
• More budget measures can be included in time for the Main Estimates, enabling parliamentarians to better oversee public expenditures. This responds to calls by the House of Commons Standing Committee on Government Operations and Estimates (OGGO) and the Parliamentary Budget Officer (PBO) for greater alignment between the budget and Main Estimates, which must be tabled in Parliament by March 1st every year.

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