July 2011
Fiscal Monitor for April and May 2011
For the first two months of fiscal year 2011-12, the federal government posted a deficit of $3.3 billion, down $1.1 billion from the $4.4 billion deficit reported in the same period in 2010-11. Although this is encouraging news, at least five to six months of financial data are required before one can assess the current results to the June 2011 Budget forecast of $32.3 billion for the fiscal year as a whole. In addition, final results for 2010-11, which will be released in the early fall, are required to fully understand the current year’s fiscal results. For example
Read MoreMR. FLAHERTY SHOULD BE WORKING THIS SUMMER
Mr. Flaherty was in New York a few weeks ago bragging about Canada’s fiscal situation, and warning the U.S. that it needs to act promptly to get its fiscal House in order. Mr. Flaherty’s trip to New York and his lecturing the U.S. government was clearly meant for Canadian consumption, since the U.S. Treasury Secretary could hardly care less about what Mr. Flaherty thinks. Perhaps Mr. Flaherty’s next stop will be Athens, Lisbon, or Rome.
Read MoreUSER FEES – HOW MUCH COULD THEY CONTRIBUTE TO THE $4 BILLION AND ARE THEY A TAX?
In both the March and June 2011 budgets the government announced that it planned to eliminate the deficit in 2014-15, one year earlier than originally targeted. This would require that the government find $7 billion in savings over the preceding three-year period. Government departments are currently involved in a Strategic and Operating Review exercise to find ways of “improving the efficiency and effectiveness of government operations and programs” totaling $4 billion annually when fully in place. The results will be contained in the 2012 budget.
Read MoreThe U.S. Debt Ceiling Impasse – Can It Happen Here?
There is presently an impasse between the U.S. Congress and the Executive about increasing the $14.3 trillion (U.S.) ceiling on federal debt. If no compromise is reached, it is estimated that the U.S. will exceed the debt ceiling by August 2nd and it will have to delay making certain payments in the current fiscal year until the ceiling is increased. This is a powerful tool by which Congress can hold the Executive accountable. At the federal level, Parliament used to have such a tool but it was quietly eliminated in the March 2007 Budget.
Read More