Johnstone: Harper’s fiscal plan falling apart
REGINA — One by one, the wheels are falling off the Harper government’s plan to ride into the October election with a balanced budget and strong economy, showcasing the PM’s purported skills as an economic and fiscal manager.First it was the plunge in oil prices, which made a mockery of the Harper’s branding of Canada as an energy superpower.The plummeting oil price also wreaked havoc with the government’s economic projections for 2015, knocking the budget’s projected GDP growth rate of 2.0 per cent in half. This, in turn, has seriously damaged, if not derailed, the government’s plans to balance the budget in 2015-16.The swan dive in oil prices has also led to an economic contraction in both first and second quarters, which Harper would know is the classic definition of a recession. Also this week, the loonie (a bird noted for its ability to dive as well as fly) plunged to depths not plumbed in over a decade. The beleaguered bird hit 76 cents US this week, the lowest level since 2004. The Bank of Canada’s lowering of the overnight rate to 0.5 per cent last week — the second 25-basis-point drop in six months — clearly spooked the markets, fearing interest rates may go lower before they come back up, putting more pressure on the weak Canadian dollar.
Finally, the Parliamentary Budget Officer (PBO) reported this week that the federal government is on course to post a $1-billion deficit in fiscal 2015-16, rather than the $1.4-billion surplus forecast in the budget.
What has been the Harper government’s response to this catalogue of economic and fiscal misfortunes, miscues and missteps? In the words of another former Conservative politician well-known in these parts, deny, deny, deny.
READ MORE: http://www.msn.com/en-ca/money/topstories/johnstone-harper%e2%80%99s-fiscal-plan-falling-apart/ar-AAdtuuG
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