Slaying the 'Dumb' Deficit Dragon

The Parliamentary Budget Officer says Canada's budget deficit will top $167 billion over the next five years.

 

All things considered, that isn't too far off Finance Minister Jim Flaherty's projection of $159 billion over the same time frame.

 

The difference is in those last few years.

 

Flaherty says 2013-14 we'll see a $11.2-billion and 2014-15 a $5.2-billion deficit -- and he seems confident a continuing re-bounding economy and maybe some nipping and tucking will bridge that gap.

 
Kevin Page is predicting a $19-billion shortfall for 2013-14 -- and Page is calling it a "structural deficit."

That means after all the stimulus spending has wrapped up and the economy has recovered to the point the government is receiving 'normal' levels of tax revenues, there will still be a deficit.

 

And that means far more drastic measures would be required to bring the books back to black.

 

Last summer, Page said the government would have to raise taxes and/or cut programs to slay the deficit -- a suggestion Prime Minister Stephen Harper called "dumb."

 

Tomorrow, Page will be before the House of Commons and Senate Finance Committees to talk more about his latest report. Something tells me the tone from both sides is unlikely to change.