Friday, July 24, 2015
Editorial cartoon by Graeme MacKay, The Hamilton Spectator – Friday, July 24, 2015
Feds can’t avoid $1-billion deficit, budget officer says
The federal Conservatives will fail to accomplish their key promise of balancing Ottawa’s books this year, instead running a $1-billion budget deficit in 2015, the parliamentary budget officer says.
Budget watchdog Jean-Denis Fréchette said Wednesday that the economic picture had changed since the Conservatives’ budget in April, which predicted surpluses in 2015-16 and over the next several years.
“Economic data has since indicated declines in real GDP (gross domestic product) that were not reflected in the government’s assumptions,” Fréchette said.
He noted that the Bank of Canada, in its quarterly forecast last week, had chopped its prediction for economic growth this year from 2 per cent to about 1 per cent.
The worse than expected economic conditions will reduce federal tax revenues, trimming $3.9 billion from Ottawa’s fiscal accounts in 2015, the budget watchdog said. But taking into account the $1 billion set aside as a rainy-day fund by Finance Minister Joe Oliver and factoring in other impacts, Fréchette said the Conservatives will run a $1-billion deficit this year.
With an eye on the Oct. 19 election, opposition parties seized on the report to slam the Conservatives’ handling of the economy. Prime Minister Stephen Harper has promised for years that 2015 would be the year his government puts an end to a seven-year string of budget deficits.
“That was supposed to be the Conservatives’ hallmark branding, wasn’t it, balanced budget?” NDP leader Thomas Mulcair asked during a campaign-style swing through southern Ontario. “We now know that’s not going to be the case.”
Mulcair said Harper put the economy at risk by relying too much on the oil and gas industry as an engine of growth. “The Conservatives put all of our economic eggs in the resource extraction basket, and now that that sector is having considerable difficulty, it’s affecting everything else in the Canadian economy.” (Source: Toronto Star)
Posted by Project Democracy on Friday, July 24, 2015