Canada is adapting its federal budgeting approach to meet the challenges of a changing global economy. The Honourable François-Philippe Champagne, Minister of Finance and National Revenue, announced the introduction of a new Capital Budgeting Framework designed to separate day-to-day operational spending from long-term capital investments. This framework will guide decisions on projects that generate enduring benefits for Canadians, such as housing, infrastructure, clean energy, and industrial development, while continuing to comply with Public Sector Accounting Standards.
The government is also modernizing its budget cycle to better align with the planning needs of businesses, investors, provinces, territories, and municipalities. Starting with Budget 2025, the federal budget will be tabled in the fall, complemented by an economic and fiscal update in the spring. This timing provides greater certainty and predictability, enabling projects to start as soon as construction season begins and allowing all levels of government to make smarter, faster investment decisions.
Under the new Capital Budgeting Framework, capital investment encompasses government expenditures or tax measures that contribute to public or private sector capital formation, including projects undertaken by Indigenous communities or other government levels. Routine operational spending, such as health and social transfers, salaries, and day-to-day government costs, will remain separate from capital investments, ensuring clarity in public financial planning and reporting.
The shift to a fall budget cycle also enhances transparency and oversight, allowing more budget measures to be included in the Main Estimates and providing parliamentarians with better tools to monitor public spending. These reforms mark a new era of financial planning in Canada, aimed at catalyzing generational investments, strengthening the economy, and empowering Canadians with long-term security and prosperity.
The full plan will be unveiled on November 4 with the release of Budget 2025.
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