The 1985 Canadian federal budget for fiscal year 1985–86 was presented by Minister of Finance Michael Wilson in the House of Commons of Canada on 23 May 1985.
[23] The budget introduced measures to implement the Accord, notably: The newly-elected government had already established a Ministerial Task Force on Program Review headed by Deputy Prime Minister Erik Nielsen in September 1984.
In the November 1984 Economic Statement the Minister of Finance had announced $4.2 billion of expenditure cuts for fiscal year 1985-86 through various measures:[29] The major initiative of the budget on the expenditure side was the partial deindexation of most major transfer programs beginning 1 January 1986:[31] Most major programs (notably Old Age Security and Family Allowances) were subjected to the new partial indexation rule whereas the Guaranteed Income Supplement and veterans' benefits remained fully indexed to CPI.
[34] Jeffrey Simpson of The Globe and Mail painted a nuanced picture of the budget pointing overall that the return to “fiscal sanity” was long overdue.
[36] The Opposition Parties strongly rejected the budget:[37] Union response was favorable to fiercely negative:[40] Quebec Finance Minister Yves Duhaime pointed the budget embraced "tragic realism", applauded the incentives for job creations provided to SMEs but criticized the cuts to the transfers to provinces.
[43] On June 27, following weeks of protests by elderly Canadians, the Minister of Finance rose in the House of Commons to announce he would reinstate the full indexation of the Old Age Security program:[44] We have met with many senior citizens.