Annual and extraordinary borrowing authorities for the Government of Canada
March 26, 2021 - Ontario, Ontario - Department of Finance Canada
Orders in council have been issued under the Financial Administration Act (FAA) approving the government’s 2021-2022 annual borrowing authority and a time-limited extraordinary borrowing authority.
Obtaining order in council authorization for the annual borrowing authority is a routine practice that takes place in advance of every new fiscal year. For 2021-2022, an annual borrowing authority of $635 billion is required in order for the federal government to support Canadians and meet anticipated financial needs. This amount represents the maximum flow or issuance of government borrowings for a given fiscal year and is not the same as approving spending. Increasing this authority does not alter the fact that all government expenditures must still receive Parliamentary approval. The annual borrowing authority is subject to the Borrowing Authority Act (BAA), including the limit on total outstanding federal government debt.
The time-limited extraordinary borrowing authority allows the government to borrow money in the current extraordinary circumstances to ensure it can continue to provide support to Canadians and Canadians’ businesses, now and through recovery. Invoking this authority does not alter the fact that all government expenditures must still receive Parliamentary approval.
Federal government action over the past year has protected millions of jobs throughout the pandemic. It has helped businesses keep their doors open, helped families afford groceries and rent, and it is providing Canadians with access to vaccines, free of charge.
The annual borrowing authority for 2020-2021 expires at the end of the fiscal year on March 31, 2021. The annual borrowing authority for 2021-2022 would expire on March 31, 2022.
The maximum amount of borrowing legislated in the Borrowing Authority Act combines the outstanding stock and expected borrowings of the federal government and its agent Crown corporations.
Extraordinary borrowings were undertaken under a separate authority between April 1, 2020, and September 30, 2020, and as detailed in the Fall Economic Statement, totaled approximately $286 billion. The COVID-19 Emergency Response Act enacted this particular extraordinary borrowing authority.
The extraordinary borrowing authority will be in place for the remainder of the 2020-2021 fiscal year and will extend until the earlier of September 30, 2021, or until Part 7 of Bill C-14, the Economic Statement Implementation Act, 2020 comes into force. That bill would increase the maximum borrowing amount permitted under the Borrowing Authority Act, as detailed in the Fall Economic Statement.
Parliament has already approved the borrowing authority framework set out in both the Financial Administration Act and the Borrowing Authority Act. Under the Financial Administration Act, with Governor in Council authorization, the Minister of Finance may borrow money if there are extraordinary circumstances that require the borrowing of money.
The government is required to report on how much is borrowed while the Order in Council is in place, and will do so.
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