JEFFREY SIMPSON
Don’t be fooled by the (surprise!) budget surplus
The Globe and Mail is hosting a debate on the economy among the leaders of the three main political parties on Thursday at 8 pm (ET). Click here for more details.
Canadians are witnessing a shell game in the phony election debate around whether we have a federal budgetary deficit or surplus.
Earlier this week, the Department of Finance announced that, lo and behold, the federal budget for the 2014-15 fiscal year that ended March 31 produced a surplus of $1.9-billion.
This surplus was described in some quarters as a surprise, which it was clearly not. Those in the know understood that Prime Minister Stephen Harper had instructed his finance minister, Jim Flaherty, to present a budget in February, 2014, that would make it look as if fiscal 2014-15 would end in a deficit of $2.9-billion.
Mr. Flaherty remonstrated that he could easily show a balanced budget for 2014-15, even a surplus. No, instructed his boss, always thinking politically. It would be better to save the news – the surprise! – until the fall of 2015, that is during an election.
In other words, the government understood long ago that the 2014-15 budget would not show a deficit, but it arranged to delay the news to maximize its political impact, which, as we see from recent media coverage, has happened.
How did the 2014-15 budget get balanced, let alone wind up with a tiny surplus of $1.9-billion that in the fiscal scheme of things means nothing, given the size of the Canadian economy?
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