The budget was presented amid poor economic conditions and soaring federal deficit.

Two month earlier, Brian Mulroney had announced his intention to resign as soon as a new Progressive Conservative leader is elected.

On 2 December 1992 Minister of Finance Don Mazankowski tabled an Economic and Fiscal Statement in the House of Commons of Canada which:[3] The budget did not bring sweeping tax changes but introduced some technical changes for corporations : The budget planned for $7.5 billion of expenditure cuts over 5 years.

[18] Preceding the budget, Mazankowski had stated that government revenues would decrease compared to 1992 as a result of "slow economic growth, continued high unemployment and low inflation".

Mazankowski stated that the rating service had based its decision on "erroneous information".