Are you angry yet Canada - Balancing the budget while building debt

Parliament lost scrutiny of borrowing in omnibus budget bill

Parliament used to annually review the billions of dollars the government borrowed until it unwittingly gave away that power in a clause buried in a budget bill that went unnoticed until it was too late.

Some parliamentarians admit they abdicated their responsibility when the legislative change slipped through unchallenged in the Conservatives’ 2007 omnibus budget bill, a time when no one expected Canada would be racking up deficits again.

Since then, the finance minister has had the authority to borrow and fund Canada’s debt without going to Parliament for permission.

"Bureaucrats have insisted the change was an administrative one and never seen as an end run on Parliament. The government was awash in surpluses for more than decade; the balance sheet was stable and debt was declining. No one foresaw the government racking up deficits again and that the outstanding debt would, in six years, balloon from $700 billion to more than $1 trillion."

At the same time, the government “consolidated” the borrowings of major Crown corporations with its overall debt. Before 2007, its borrowing on behalf of the Crowns would have needed Parliament’s approval, but no longer.

Canada’s budget watchdog recently flagged the “prodigious” growth and magnitude of federal loans and other “non-budgetary spending” over the past six years.

On Tuesday, the Parliamentary Budget Office is following up with a report on the Main Estimates, the government’s spending plan for the year, which includes a closer look at loans, loan guarantees and other investments, largely through Crown corporations, made with little scrutiny. These range from direct loans to students through the Canada Student Loans program to loans through Crown corporations to people or businesses.

The loan ceiling peaked at more than $306 billion in 2008-09 after the 2008 global financial crisis when governments were shoring up the economy with loans and intervening in the market with programs such as the Conservatives’ stimulus spending.

READ MORE: http://www.montrealgazette.com/news/News/10891906/story.html


Former PBO Kevin Page said the system is so broken that it will take a Royal Commission to fix it.

“Those who govern are supposed to do so by the consent of the people. Government and Parliament have become disconnected with our people. We have forgotten our history. There will be a price to pay,” said Page.