December 2012
MAKING GOVERNMENT BUDGET AND FINANCIAL PLANNING MORE UNDERSTANDABLE: THE TRIUMPH OF OPTIMISM OVER EXPERIENCE
Once again we have entered the pre-budget speculation period.
FISCAL MONITOR FOR OCTOBER 2012: TOO SOON TO PREDICT DEFICIT OUTCOME FOR THIS YEAR
For the first seven months (April to October) of fiscal year 2012-13, the federal government posted a deficit of $10.6 billion, down $3.3 billion from the deficit of $13.9 billion reported in the same period in 2011-12.
Read MoreFINANCE COMMITTEE - PRE-BUDGET CONSULTATIONS: WASTED OPPORTUNITY
On December 12, 2012, the House of Commons Standing Committee on Finance tabled its pre-budget consultations report “Jobs, Growth, Productivity and Demographic Change: Challenges and Opportunities for Canada”. This “majority” report, primarily reflecting the views of the Government, is a waste of taxpayers’ time and dollars.
THE FEDERAL-PROVINCIAL FISCAL DIVIDE
Canadians have developed an almost pathological fear of deficits and debt. Perhaps this is a result of the fiscal crisis in the mid-1990s and the tough actions that were taken by both federal and provincial governments to restore fiscal credibility.
The federal Conservative government inherited a surplus of almost $14 billion in 2006 and then took actions almost immediately to wipe it out. The deficit situation was then worsened by the 2008-2009 recession and the temporary stimulus program. Since then, the elimination of the deficit has been the priority of every federal budget.
Read MoreANOTHER ROUND OF BUDGET CONSULTATIONS
Mr. Flaherty has just announced a new round of budget consultations. Basically, Mr. Flaherty is looking for suggestions on how to “strengthen our economy in the face of global economic threats”; with “cost-neutral or low cost measures”, focusing on “more efficient and effective spending” that builds on the “government’s belief of respecting taxpayers’ dollars” and “encourages private sector growth and leadership”. These are pretty much the same questions that he raised in last year’s budget consultations.
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