Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Wednesday November 2, 2016
Fiscal update boosts Liberal infrastructure plans but offers no path back to balance
Justin Trudeau’s Liberal government is responding to the sluggish global economy with a fall economic update that puts a even greater focus on infrastructure spending than in its spring budget, while making it easier for private sector investors to add their money to the government’s already considerable funding pot.
While the projected deficit for 2016-17 has moved down to $25.1 billion from the $29.4 billion forecast in the spring budget, the new figure no longer has any kind of a safety cushion built in. Absent that cushion, the deficit has actually grown thanks to some $1.7 billion in new spending since last spring.
The deficit situation improves toward the end of the government’s five-year horizon, to $16.8 billion in 2020-21. The projected debt-to-GDP ratio — the key measure of the affordability of a government’s debt — by then returns to the 31 per cent mark, where it was in 2015-16 as the Liberal government took office.
Morneau told reporters his government made the right decision in preparing itself for what is happening to the economy.
But Interim Conservative leader Rona Ambrose said the Liberals’ massive spending has created no new jobs and has led to a stalled economy.
“They think this failed plan is somehow working, and they’re doubling down on it,” she said.
Repeating the party’s line that the Conservatives are the voice of taxpayers, Ambrose accused the government of “making lives more expensive for Canadians.”
“Canadians are worse off today than they were a year ago,” Ambrose said. “But instead of action, we hear excuses.” (Source: CBC)