Politics·Analysis

Federal surplus is good political news for both Stephen Harper and Tom Mulcair

How rare it is during an election campaign to see any kind of agreement between two political rivals. But Conservative Party Leader Stephen Harper and NDP Leader Tom Mulcair both praised as "good news" the figures released today by the Finance Department.

Canada posts surplus of $1.9B for the 2014-15 fiscal year

Conservative Party Leader Stephen Harper and NDP Leader Tom Mulcair have committed to balancing the books, but Liberal Leader Justin Trudeau says he will run deficits to undertake infrastructure investment. (Canadian Press)

How rare it is, especially during an election campaign, to see any kind of agreement between two political rivals considered ideological opposites, particularly on anything related to the budget. 

But Conservative Party Leader Stephen Harper and NDP Leader Tom Mulcair both praised as "good news" the figures released Monday by the Finance Department showing that Canada posted a surplus of $1.9 billion for the 2014-15 fiscal year.

Harper, not surprisingly, was a little more praiseworthy of the numbers than Mulcair, calling it "incredibly good news."

"I see zero to little risk that we will have anything other than a surplus for the second year in a row, based on the trajectory we are on," said Harper.

The Conservative leader's buoyant mood was hardly surprising, as the surplus ends six years of deficits under his watch and allows him to boast that the books, under his economic stewardship, are in the black. It also comes on the heels of last month's Finance Department report that said Canada was in a $5-billion surplus for the April-to-June period this year.

Mulcair has pledged to balance the books

But the numbers are also a political boon for Mulcair. He has unveiled some pricey campaign promises, including billions of dollars to fund a national daycare program and enhanced health care, all while pledging to balance the books, or, in fact, bring in a surplus within the first year of an NDP government.

A Finance Canada report released today shows that the country posted a surplus in 2014-15. 0:43

Mulcair, who has faced questions about his ability to pay for these costly pledges, can now peg some of his spending plans on the so-called "surprise" surplus and better-than-expected revenues.

The NDP leader. who will release a full costing of the party platform on Wednesday, admitted as much today, saying the surplus bodes well for the NDP's commitment to balance the budget.

The numbers, he said, mean the "NDP is going to be starting off on the right foot by proposing to have a balanced budget, talking to Canadians about what we can accomplish together in health care [and] quality, affordable $15-a-day child care.''

Never mind that some economists like Unifor's Jim Stanford were downplaying the news, telling CBC's Carole MacNeil that the surplus figures in a budget of this size amount to a "rounding error" and that today's "very political announcement" had little economic significance.

Good timing for Tories

Craig Alexander, vice-president of economic analysis for the C.D. Howe Institute, agreed that it was "absolutely no surprise" that the Tories would come in with a surplus, proof of which could be found in the financial markets, which barely responded to the news.

Conservative Leader Stephen Harper says it is absurd to say that lapses in government department spending caused the current recession while helping to create a modest budget 2:08

But in politics, optics are everything, and the news, while helpful for the NDP's promises, couldn't have come at a more opportune moment for the Tories, who have been repeatedly thwarted in their attempts to set the agenda of the campaign. 

Instead, the party has suffered weeks of negative headlines, beginning with revelations from the Mike Duffy trial, controversies over candidates, news that Canada was in a technical recession and criticisms over the government's handling of the Syrian refugee crisis.

These issues had also prompted reports of grumblings within the party ranks about the campaign itself, questions about whether it was in some kind of freefall, and reports that the Tories were reaching across the globe for help from an Australian political strategic wizard to steady their ship.

Most importantly, today's figures allow Harper, at least for the time being, to refocus the campaign on the issue he had hoped to make the campaign about  — the economy, which fortuitously for the Conservatives, will be the subject of this week's second leaders' debate.

Meanwhile, it was left to Liberal Leader Justin Trudeau, who has made deficit spending a key plank of his campaign, to rain on the so-called "good news" of today.

Trudeau has said he would funnel federal funds into infrastructure spending. A Liberal government wouldn't balance the books for three straight years and would instead run "a modest short-term deficit" of less than $10 billion for each of those years.

And, despite today's announcement of the surplus, Trudeau wasn't backing down from that pledge. 

'We need investment and that is what we are going to do to grow the economy, to balance the books in
2019," Trudeau said.

He immediately blasted today's news of a surplus, accusing Harper of setting a "political goal," of underspending, and of "making cuts to Veterans Affairs, to Aboriginal Affairs, to seniors — in the billions of dollars — so he could balance the books in time for his election."​

With files from The Canadian Press

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