March 2013
RECONCILIATION OF SPENDING BETWEEN THE ESTIMATES AND THE BUDGET
Ask the President of the Treasury Board about whether spending will be going up or down in 2013-14 and he’ll tell you that it’s going down. Ask the Minister of Finance and he’ll say it’s going up. Who is right and why the conflicting answers? The Minister of Finance will likely be more accurate than the President of the Treasury Board. But why the confusion and why can’t Canadians and Parliamentarians get a straight answer?
Read MoreSPENDING RESTRAINT BY "STEALTH" IN BUDGET 2013
The single largest “restraint” measure “not” announced in Budget 2013 was an increase in the “lapse”, which resulted in an estimated “savings” of between $2 to $3 billion (1) per year. This, along with an overly rosy economic forecast and increased enforcement and compliance by the Canada Revenue Agency were the main factors underlying the government’s forecast of a balanced budget in 2015-16.
Read MoreFISCAL MONITOR FOR JANUARY 2013
For the first ten months (April to January) of fiscal year 2012-13, the federal government posted a deficit of $13.4 billion, down $0.7 billion from the deficit of $14.1 billion reported in the same period in 2011-12.
Read MoreBUDGET 2013: BY "HOOK" OR BY "CROOK" - A BALANCED BUDGET IN 2015-16
There were no surprises in Budget 2013. Minister Flaherty had done an excellent job of pre-conditioning on what to expect: a commitment to eliminate the deficit by 2015-16; no new “risky” spending; some funding for infrastructure and skills training; and further restraint measures to offset revenue losses due to slower economic growth in 2013. But is this the right budget for the current economic circumstances and is the plan to eliminate the deficit in 2015-16 credible? The answer to both these questions is no.
Read MoreALTERNATIVE BUDGETS: DOES THE GOVERNMENT LISTEN?
On March 11th, the Canadian Centre for Policy Alternatives (CCPA) released their “Alternative Federal Budget 2013”. On March 18th, the C.D. Howe Institute released its “Prudence and Opportunity: A Shadow Federal Budget for 2013”. What impact will their policy recommendations have on Minister Flaherty’s 2013 Budget? None at all.
SOME FINAL THOUGHTS ON THE UPCOMING BUDGET
Minister Flaherty has finally announced that the budget will be presented on March 21st. This is eight days earlier than last year, but unfortunately too late to make the Main Estimates that were tabled before March 1st relevant to Parliament. As has been the case for six of the government’s eight budgets, the Main Estimates will not be based on the most recent budget economic assumptions and policy decisions. Parliament will once again be asked to approve Government spending for the upcoming fiscal year, which will become out of date with the tabling of the 2013 budget.
Read MoreTHE PRIME MINISTER SHOULD HAVE READ THE ENTIRE C.D. HOWE REPORT
In response to a question by the Opposition regarding our article entitled `”Restoring Integrity and Credibility to the Budget Process”(1) , the Prime Minister replied that according to ``the non-partisan C.D. Howe Institute (2), this government has more transparent public accounts than at any time in history, it is more transparent than any other senior government in the country`` (3).
Read MoreMINISTER FLAHERTY SHOULD BE WORRIED
There could be three budgets before the next general election in the fall of 2015. The sole objective of these budgets will be to eliminate the deficit by 2015-16. This has been the objective of the government for some time, not because there is serious deficit problem, but because the government is betting its “good management” reputation on its achievement prior to the next election. Whether the deficit will actually be eliminated in 2015-16 will not be known until the fall of 2016, when the final audited results are published, but by that time the election will be over.
Read MoreRESTORING INTEGRITY AND CREDIBILITY TO THE BUDGET PROCESS
The Minister of Finance will soon be completing his pre-2013 Budget consultations. Over the coming weeks, the media and pundits will begin speculating about what the Minister of Finance will do in his 2013 budget.
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