The federal budget last week (March 21) provoked the usual range of comment and criticism from the media, members of the opposition parties, and the blogosphere. I read very little discussion of the traditional idea that budgetary proposals are to be kept strictly secret until announced in Parliament by the Minister of Finance. Andrew Coyne’s column in Saturday’s National Post (March 23, p. FP4) was one exception. As has been the case with budgets in recent years, most of the contents of this year’s budget were leaked to the media in the days leading up to Budget afternoon. This was not always the case.
Traditionally, no information about the contents of the Budget was released prior to the Minister’s speech in the House. There were reasons for this. When the major focus of the budget was a change in the tax rates applicable to imports (tariffs) or on income from various sources (investments rather than labour, for example), secrecy was important. It prevented insiders from profiting from their advance knowledge of the proposed changes. At an earlier time, especially in the UK, any pre-budget leak compelled the minister involved to resign. In1947, a budget leak in the UK led to the resignation of the Chancellor, Hugh Dalton, even though there was no real opportunity for anyone to profit from it. The tradition of ministerial responsibility in that country was sufficiently strong that Dalton had to go.
Canada draws its parliamentary traditions from the UK, but doesn’t necessarily follow all of them. The convention that a budget leak leads to a resignation is one that we don’t. We have had our examples. The Lalonde budget of April, 1983 is one. In the course of a photo op the day before the budget, a photograph of the Minister holding the budget document showed a proposed spending initiative of some $4.6 billion for job creation. Lalonde was roundly criticized for the leak, but did not resign. In 1989, a summary of Michael Wilson’s budget was given to a television reporter in suspicious circumstances, and made public. Wilson did not resign.
Today, governments make a habit of leaking significant portions of their budgets in advance. I suspect they do this in the hope that the media will buy in to their spin on the significance of the changes. The current Flaherty budget was no exception. No one really complains about this, least of all the media. In this sense, the traditional importance of budget secrecy has lost most of its relevance. But we ought to be concerned about other developments related to the budget process which indicate that we now face a different, and disturbing, approach to budget secrecy.
In addition to providing the government with a platform from which to advance its political agenda, the budget is important for the detailed information it provides about the financial analysis underlying that agenda. At least, this is what it is supposed to do. Increasingly, however, knowledgeable observers are pointing to the lack of good, intelligible information in the budget. Two former senior Finance officials (Scott Clark and Peter DeVries) in a paper to be published in Insider Policy magazine (as reported by Mark Kennedy, Postmedia news, March 4, 2013) criticize the secrecy aspects of the current budget process. They point out that without good information about the budget proposals, parliamentarians are voting on measures that they do not – and probably cannot – understand. This may suit the political aims of the government, but it risks seriously eroding one of the basic roles Parliament is expected to play in our democratic system. In a similar vein, the government last year downsized the role of the Parliamentary Budget Officer. This does not augur well for the dissemination of objective analysis about the financial basis for government decisions. And thirdly, last year the government chose to bury its budget measures in an omnibus bill along with other non-fiscal matters dear to the government’s heart. I think this was a particularly egregious misuse of the usual tax legislative process. The government was roundly criticized for doing so as it limited the opportunity for parliamentary debate on both the budget and the non-budget measures.
There obviously will be different views on the implications of these developments. I can say goodbye to the old notion of budget secrecy without much regret, but I have concerns about where the recent changes seem to be taking us.