Canada cannot afford Justin Trudeau.Sound fiscal management? Not this government
Pinning down deficit figures from the federal Liberal government is like shooting a moving target.
That is also spinning and obscured in darkness.
Through a fog.
Even the independent Parliamentary Budget Office (PBO) has trouble figuring out how big the Liberals’ annual deficits will be.
Back in April, following Finance Minister Bill Morneau’s latest budget, the PBO projected Ottawa’s deficit would be $21.4 billion this year, not $17.5 billion as Morneau claimed. That’s a difference of nearly $4 billion or 22%.
Then in October, the PBO said maybe this year’s deficit would only be about $1.3 billion higher than Liberal projections. Only.
But according to Conservative Finance critic Pierre Poilievre, in a conversation he had with PBO officials earlier this week, the budget office once again expects this year’s deficit to be over $20 billion. And next year’s could be closer to $30 billion.
Liberal spending is out of control.
Remember how Trudeau and his party pledged to run a trio of “small” ($10 billion) deficits to stimulate the economy, then return the budget to balance by 2019? That was always a farce, of course.
First, you cannot stimulate a $1.6-trillion economy with $10 billion – six-tenths of 1%. (You can’t really stimulate much with an extra $30 billion, either. But you can sure slosh around a lot of goodies to your friends – like giving an extra $1.3 billion in equalization to Quebec.)
Second, it is always dangerous to give Liberals permission to go into the red. As the American satirist, P.J. O’Rourke once wrote, giving money and power to liberals “is like giving whiskey and car keys to teenage boys.”
The PBO now predicts there is less than a 30% chance of budget balance being restored by as early as 2024. Several experts have even calculated the Liberals are spending so much, budget balance is unlikely before the 2040s.
Kevin Page, the former parliamentary budget officer who now runs the Institute of Fiscal Studies and Democracy at the University of Ottawa, often locked horns with the Harper Tories. Like the Trudeau Liberals, the Tories often refused to release the financial documents the PBO wanted.
Nonetheless, Page estimates the Harper government’s Deficit Reduction Action Plan (DRAP) cut nearly $14 billion (roughly 5%) a year from federal spending and reduced the federal civil service by 10% (about 26,000 full-time positions).
Had the Tories been re-elected in 2015 and had they remained true to their DRAP, they would this year be spending $283 billion on federal programs and operations. Instead, the Liberals are on a path to spend $311 billion – roughly $28 billion more per year.
Insiders have admitted to me and many other journalists that there was genuine relief in the bureaucracy when the Harper Tories were defeated. The shackles were off. They were sure the Libs would have their backs if they spent, spent, spent.
So they have spent extravagantly and the Libs, indeed, have been very supportive. All this spending, though, has affected more than the federal deficit.
The first thing all this government borrowing does is drive up the cost of credit as Ottawa competes to borrow money with consumers looking to buy homes or vehicles.
But it also drives up taxes. Without increased taxes, Ottawa’s deficits would be higher still — $50 billion or more – and that would cost votes.
So the feds have raised taxes on average families by about $1,000 a year, with much more on the way (maybe double that) once their carbon tax and higher CPP premiums are implemented.
The Liberals pretend to care about sound fiscal management, but they don’t.https://torontosun.com/opinion/columnis ... government