Harper, Trudeau and Mulcair spar on deficits following recession report

The issue of deficits again takes centre stage on the campaign trail in the wake of Statistics Canada's confirmation that the country fell into recession in the first half of the year.

'Extremely unusual circumstances,' forced previous Tory deficits, Harper says

Conservative Leader Stephen Harper describes when deficits are necessary and how his views contrast with the NDP and the Liberals on budget discipline. 5:12

The issue of deficits again took centre stage on the campaign trail in the wake of Statistics Canada's confirmation that the country fell into recession in the first half of the year.

During campaign stops Wednesday, the three major party leaders offered strikingly opposing visions for how to best reinvigorate the stalling economy and whether deficits have a role to play in that effort. 

Conservative Leader Stephen Harper said, despite two consecutive quarters of negative growth, Canada's GDP grew in June and the economy is expected to grow later this year. A balanced budget should remain a priority, he said. 

"Proposing a deficit right now with economic growth is a recipe for permanent deficits," Harper said during a campaign event in North Bay, Ont., where he announced tax credits for mining projects.

"It's why we're not going to do it and why I think the country will reject that proposal from the other parties," he added, alluding to Liberal Leader Justin Trudeau's plan of running three straight deficits if elected.

Conservative Leader Stephen Harper said that the global economic crisis of 2008 necessitated deficits for the good of Canada's economy. (Adrian Wyld/Canadian Press)

When pressed by reporters about deficits that his government has run in the past, Harper said multiple external factors — especially the global economic crisis of 2008 — meant that running deficits was the prudent approach to stimulating growth.

"We faced extremely unusual circumstances," in 2008-09, Harper said. "We are nowhere near those kinds of circumstances today and what I have said before is that I don't, I do not believe, that you would run a deficit on purpose if the economy is actually showing growth."

'They hope in vain'

Harper also criticized the NDP leader's pledge to balance his government's first budget, saying Tom Mulcair has made too many costly election promises to achieve that goal without drastically raising taxes or abandoning many of his commitments.

Speaking at a campaign stop in Trois-Rivieres, Que., on Wednesday morning, Trudeau said both Harper and Mulcair will have to cut spending to honour their assurances of balancing the budget.

Liberal Leader Justin Trudeau argued again Wednesday that deficits are the most effective way to grow the economy amid global instability. (Paul Chiasson/Canadian Press)

"They want to cut programs and they hope in vain that the same plan that has been in place for the last 10 years will still work and will kick-start the economy," the Liberal leader said, adding that his plan to run deficits to 2019 and increase infrastructure spending will spur real growth in a slackening economy.

"Mr. Harper doesn't understand that in order to grow the economy in the 21st century we need to invest in people and give them the tools they need to succeed," he said.

"Confident, optimistic countries are always willing to invest in their own future rather than believe that cutting is somehow the path to growth and success."

Trudeau spent the day trying to shore up support in Quebec. This morning he reannounced his plan to invest $6 billion over four years into green energy infrastructure and jobs. 

Mulcair speaks in B.C. 

For his part, Mulcair reiterated his pledge that the New Democrats will not run deficits if they win power.

He said the NDP will be able to deliver on its various spending promises by cutting some Conservative initiatives.

NDP Leader Tom Mulcair has said new revenue streams and roll-backs of some Harper policies mean a New Democratic government could balance the budget in its first year. (Jonathan Hayward/Canadian Press)

"We have a plan for investing in infrastructure and housing, but it's all done within the framework of a balanced budget," Mulcair said in Kamloops, B.C., where he committed to $28 million in funding for programs geared towards getting children and young people involved in team sports and physical activity. 

With files from Canadian Press


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.