October 2012
PARLIAMENTARY BUDGET OFFICE: OCTOBER 2012 ECONOMIC AND FISCAL FORECASTS - CORRECTION
On October 29, 2012, the Parliamentary Budget Office (PBO) released its fall “Economic and Fiscal Outlook Update”. The Update is relatively positive, given the significant international and domestic economic risks that currently exist(see http://www.3dpolicy.ca/node/212).
FISCAL MONITOR FOR APRIL TO AUGUST 2012
For the first five months of fiscal year 2012-13 (April to August), the federal government’s deficit amounted to $6.2 billion, down $2.8 billion from the same period in 2011-12. Of this year-over-year improvement , budgetary revenues were up $3.4 billion, public debt charges were down $0.9 billion while program expenses were up $1.4 billion.
Read MoreAUDITOR GENERAL'S FALL 2012 REPORT CHAPTER 7: LONG-TERM FISCAL SUSTAINABILITY (1)
In his 2012 fall report, the Auditor General raises the issue of “long-term fiscal sustainability” – the government’s capacity to finance its activities and debt obligations in the future without imposing an unfair tax burden on future generations. Such analysis is especially important, given the impact of an ageing population on economic growth, and government revenues and spending, especially for public pensions and health care.
THE GLOBAL ECONOMIC OUTLOOK IS DETERIORATING RAPIDLY. MR. FLAHERTY SHOULD BE WORRIED. WE ARE.
Right now, the primary focus of the Opposition parties and the media is on the second Budget Omnibus Bill and rightly so. Like the first Omnibus Bill, it is very large - 443 pages. We can now finally discover what those vague and obtuse references in the budget actually mean. Once again the credibility of the budget process is being eroded and the authority of Parliament undermined.
Canada Employment Insurance Financing Board: Is Its End In Sight?
In the second Budget Omnibus Bill related to the 2012 Budget, the Government proposes to suspend the operations of the Canada Employment Insurance Financing Board (CEIFB) until such time the Employment Insurance (EI) Operating Account returns to balance. According to the 2012 Budget, this is not expected until 2016. Is this the end of the CEIFB? Lets hope so.
Improving Budget Accountability and Transparency: The Government Needs to Explain the Deficit Outcome (1)
On October 5, 2012, the federal Department of Finance released the audited financial results for 2011-12 in its Annual Financial Report (AFR). As has been the case since 2006-07, this year’s report contained little meaningful analyses on what impacted on the financial results for 2011-12. For example, although the report includes a table showing the differences between the final results for 2011-12 and the March 2012 Budget forecast for 2011-12, explanations of these changes amounted to less than four lines and were questionable.
Read MoreFederal Deficit for 2011-12 Higher Than Forecast: Does It Matter for the Government's Fiscal Strategy?
The federal Department of Finance released the final audited financial results for 2011-12 in its Annual Financial Report (AFR) on Friday, October 5, 2012. The deficit for 2011-12 was $26.2 billion; $7.2 billion lower than the final outcome for 2010-12. This is a significant reduction. However, the deficit for 2011-12 was $1.4 billion higher than the March 2012 Budget forecast of $24.9 billion, due to lower revenues. This outcome will likely impact negatively on the results for 2012-13 and beyond.
Read MoreImproving Budget Accountability and Transparency: Parliament and Canadians Should Know What the Government is Planning to Spend: And They Don't
Hypothetical Interview:
Interviewer: Minister Flaherty, according to your 2012 Budget, how much money is the government expected to spend in 2012-13?
Minister Flaherty: $276.1 billion.
Interviewer: Minister Clement, as President of the Treasury Board overseeing government spending, how much do you expect the government to spend in 2012-13?
Minister Clement: $254.2 billion.
Interviewer: That’s a difference of nearly $22 billion. How do you explain this?
Read MoreImproving Budget Accountability and Transparency: Strengthening the Parliamentary Budget Office
Kevin Page’s term as the Parliamentary Budget Officer (PBO) expires in March 2013. He has already announced that he will not seek a renewal of his appointment. In this regard, he has done the government a favour since the chances of the Harper Government renewing his term are virtually non-existent given how they have treated him and his office.
Read More