'Balanced budget' bill a political move, says former PBO Kevin Page
Conservative legislation would force future governments to keep books balanced
Former budget watchdog Kevin Page says a Conservative move to force future governments to keep balanced budgets is a "political" move that isn't necessary.
"Do we need the legislation? We didn't need the legislation from the mid-1990s to 2007-2008, when we had 11 years of surpluses," Page told Power & Politics host Evan Solomon Wednesday evening.
"I think the government feels somehow it needs to constrain itself."
Page's comments came after federal Finance Minister Joe Oliver's announcement earlier on Wednesday that he will table a bill later this month preventing future governments from running budget deficits except in "extraordinary circumstances," such as a recession or natural disaster.
The new legislation comes just weeks before the federal government is set to deliver its first balanced budget in seven years on April 21. Oliver's announcement fulfills a promise made in the 2013 speech from the throne.
But Page, who served as Canada's first Parliamentary Budget Officer from 2008-2013, said requiring governments to keep their budgets in the black could have unintended consequences.
"If you're going to commit in law that you're going to balance these books, you need someone looking over your shoulder," he said. "Governments could use their discretion around, 'do we book this now, do we book this later? Do we sell this asset now or later?' These become timing issues...so that's a potential drawback."
Doubling TFSA limit 'regressive'
Page also blasted the government for its fiscal track record.
"Take away the first two years when they inherited quite strong fiscal balances, and they've generated about $130 billion worth of debt," he said. "Now we're getting back to balance. They created the deficit and now they're saying they need legislation in order to have the discipline to get rid of it."
Page also expressed concern over another Conservative fiscal promise, calling the move to double the limit for tax-free savings accounts from $5,500 annually to $11,000 "regressive."
"Will it generate the savings for the middle class, the lower class? You would have to be quite wealthy to have $11,000 in savings after all the debt you'd have to take care of through the course of the year," he told Solomon, adding that the government's focus should be on infrastructure investment.
"I think the bigger issue is we need to grow the economy," he said.
Watch the full interview with Kevin Page on CBC News Networks' Power & Politics in the player above.
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