House of Commons Procedure and Practice

Second Edition, 2009

House of Commons Procedure and Practice - 18. Financial Procedures - The Financial Cycle

*   The Financial Cycle

The fiscal year of the Government of Canada runs from April 1 to March 31.[9] However, the planning for the fiscal year begins much earlier with the preparation of departmental expenditure plans, which are developed in accordance with the government’s policy and budgetary priorities, and the pre‑budget consultations by the Standing Committee on Finance.[10] The expenditure plans are submitted to the House in their consolidated form as the “main estimates”. At the same time, the Department of Finance is compiling the information taken in during the pre‑budget consultations and preparing its economic forecasts. The government’s efforts to reconcile its spending obligations and revenue projections are reflected in the budget.

The budget outlines the government’s fiscal, social and economic policies and priorities, while the estimates set out, in detail, its projected expenditures for the upcoming fiscal year. Typically, the budget is presented in the second half of February, although the government is under no obligation to do so.[11] Under normal circumstances, the main estimates are tabled in the House on or before March 1 and submitted for concurrence by the House no later than June 23.[12]

Should the government require funds while waiting for, or in the absence of, income from taxes and other revenue sources, it may borrow funds. Should there be a change in the government’s requirements as set out in the main estimates, Parliament will be asked to approve one or more “supplementary” estimates.

The tabling of the Public Accounts of Canada and the Annual Report of the Auditor General, and their review by the Standing Committee on Public Accounts, completes the government’s annual cycle of financial transactions.[13]

Figure 18.1 The Financial Cycle


An image depicting, in a horizontal oval shape, the financial cycle. The cycle is divided into three supply periods (one ending June 23, the second ending December 10 and the third ending March 26) and shows what financial activities may occur during each of these periods. Among the items listed for the cycle are the tabling of Main Estimates on or before March 1, committees reporting the Estimates back to the House, concurrence in the Estimates and the adoption of appropriation bills, pre-budget consultations by the Standing Committee on Finance, the tabling of the Public Accounts and the budget presentation.

[9] Financial Administration Act, R.S. 1985, c. F‑11, s. 2. Until 1906, the fiscal year ran from July 1 to June 30. See Debates, May 10, 1906, col. 3065; Journals, June 19, 1906, p. 400; Debates, July 13, 1906, p. 7918.

[10] Standing Order 83.1.

[11] There is no requirement that the government present an annual budget; however, this has been the practice followed since the mid‑1980s. In an effort to introduce an element of certainty into the timing of the budget, governments have tried, wherever possible, to present their budget in mid‑February, before the main estimates are tabled (Wilson, M.H., The Canadian Budgetary Process: Proposals for Improvement, Ottawa: Department of Finance, May 1985, pp. 1‑8; Treasury Board of Canada, The Expenditure Management System of the Government of Canada, Ottawa: Minister of Supply and Services Canada, 1995, p. 4). See the section in this chapter entitled “The Budget”.

[12] Standing Order 81(4) and (18). Standing Order 81 sets out a precise House schedule for the consideration and disposal of the business of supply. If the March 1 deadline is met, the House typically considers and disposes of the main estimates for the then fiscal year before it adjourns for the summer. If, because of an unscheduled adjournment or a prorogation or dissolution of Parliament, the March 1 deadline is not met or the main estimates are not concurred in by the end of June, the government proposes a new supply schedule for the approval of the House, usually after negotiations with the parties in opposition. See, for example, Journals, March 4, 1996, pp. 34‑5, 39‑41; September 23, 1997, p. 14; October 5, 2004, pp. 12‑4; April 4, 2006, pp. 13‑4.

[13] Standing Order 108(3)(g).

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