Where is Trudeau’s balanced budget?
Before the last election, Trudeau was adamant that under his leadership, Canada would have a balanced budget this year. Back in 2015, during a leader’s debate on the economy, he very earnestly stated, into the camera; “I am looking straight at Canadians and being honest the way I always have. We said we are committed to balanced budgets and we are. We will balance that budget in 2019.”
Turns out, this was an ironic statement, on two fronts. The Liberals projected total budget deficits, including 2019, were $23.9 billion, with the reality being $72.7 billion; for a miss of $48.9 billion.
Now, budget surpluses are not being projected until 2040. Where is the outrage? To be fair, all deficits are not necessarily bad. However, deficit spending has been more of a fiscal tool, utilized during recessionary periods; most recently in evidence over the 2007-09 worldwide downturns (those budget deficits were substantially cleaned off by 2015).
The economic case for creating deficits during good times is not so clear.
The economy is ticking along at full tilt, and the employment rate is at its lowest level since the mid-1970s. Simply put, Canada does not need fiscal stimulus. To my mind, Trudeau has been favouring current “Sunny Ways” consumption, to the detriment of future generations.
An oft-hear refrain is that deficits do not matter, so long as government debt as a share of the economy is modest and stable — exactly what the Liberals are now touting, that Canada has the lowest debt-to-GDP ratio in the G7. Frankly, that is what we would expect, given the comparable countries fiscal and political circumstances.
The Liberals want us to give them a pass on these huge overruns, and broken promise(s), by using another benchmark. Hey, the promise was low deficits and a balanced budget by 2019!
Going forward, why believe any fiscal promises Trudeau makes in this year’s election campaign? Generally, Canadians appear to be a compliant lot, and in my opinion, don’t relate the recent massive “pre-election” federal spending announcements to being borrowed money that has to be paid back, by your grandchildren.There is no free lunch, people.