In a new analysis posted on his website, parliamentary budget officer Kevin Page says the federal government will rack up between $46 billion and $105 billion in new debt over the next five years, even before Finance Minister Jim Flaherty introduces massive new stimulus spending on Tuesday.
Tip o the hat to impolitical for this one.
Given the probable spin and BS we will no doubt be subject to over the next couple of weeks as the Harper regime tries to sell its budget this report should be required reading for all of us.
Any move to stop Mr Page from publicly publishing his reports must be resisted, he remains one of the few checks we have upon government misinformation. I just hope that Harper will take notice of Obamas moves towards being “open and accountable” and how quickly things can be changed for the better on that score when there is a desire within government to do so.
It is difficult to summarize this report but the final couple of paragraphs perhaps cuts to the chase best….
To-date the Government’s fiscal policy framework has been based on a combination of
several stated fiscal targets over differing time horizons:
– Short-term: Balanced budgets or better annually;
– Medium-term: 25% federal debt-to-GDP ratio by 2011-12, and non-increasing program spending relative to nominal GDP; and,
- Long-term: Eliminate net total government debt by 2021.
As the PBO’s November 2008 EFA report highlighted, and a concern that is even more acute now, the weakened global and Canadian economic outlook poses a significant challenge for the Government to achieve its stated short-term and medium-term fiscal targets. Which of these targets will be re-stated, will some be re-affirmed, or replaced with new policy targets?
The current economic slowdown is global. As such, there are many external influences beyond the control of Canadian policymakers that will impact Canadian economic growth and fiscal finances. Further, PBO analysis suggests that for the Government to return to a surplus position over the next five years, contractionary measures (i.e., additional spending restraint and/or increased taxes) would have to be taken which would dampen the effectiveness of automatic fiscal stabilizers while the economy remains well below its potential capacity.
Will the Government provide a transparent medium-term fiscal plan that addresses the projected weakness in the economy and supports a meaningful recovery towards the economy's potential level of activity without limiting the Government's fiscal capacity to respond to future spending pressures arising from population ageing?
Edit – Then there is this from Canwest, there seems to be a slight disagreement on this, but whats a few billion dollars here or there!
OTTAWA -- Canada will post an overall deficit of $34-billion next year and $30-billion the following year before returning to surplus in five years, the Prime Minister's Office said Thursday.
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