Liberal budget still doesn't add up, even with a few grains of salt
Fresh details from Ottawa only deepen the murkiness of Bill Morneau's financial plan
So, back to that federal budget for a moment.
I know this is tiresome for some, particularly the people in the prime minister's office, who'd apparently like to just shrug and move on.
But budgets are supposed to make sense, and add up, and the one the government presented to Canadians on March 22 simply does not.
It remains a bit of a shell game, and at the very least leaves the impression that the government may be holding back some uncomfortable fiscal realities.
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Almost as soon as the budget landed, the Parliamentary Budget Office concluded the document not only rested on an absurdly low assumption of economic growth, it omitted data crucial to assessing the government's long-term claims.
The PBO demanded the missing data, and received a puzzling reply: We'll only give it to you if you promise to keep it confidential.
Then the PBO issued a public criticism, produced some heat, and, on Friday, Deputy Finance Minister Paul Rochon caved, and provided the figures in a letter.
Finance officials notified journalists, and basically declared case closed.
But, um, it's not.
First of all, the new data shows that funding for a package of new programs that made big news on budget day — including the new middle-class tax break and child benefit — will decline drastically after fiscal 2017-18.
In fact, by fiscal 2020-21, it drops from $3.6 billion to $900 million — a drop of nearly 75 per cent.
Does that mean the child benefit will somehow be clawed back? Or that the tax break will disappear? Or Canadians will start making so much money they won't qualify?
New spending decisions
Asked for an explanation, a senior finance official, speaking on the condition of anonymity, said the government expects to pay far less in child benefits as the years go by because it believes there will be a surge in high-income households, which will perforce not qualify.
Similarly, those households will benefit less from the tax break, which is aimed at lower income earners.
But, he warned, it's best not to pay much attention to figures going out further than two years.
Somebody's going to have to offer a much better explanation.— Peter DeVries, 3D Policy
The numbers provided Friday, he said, are "notional," or "placeholders."
"Take them with a grain of salt."
In the years to come, noted the official, cabinet will make new spending decisions. There will be new priorities.
But the new Friday figures, the sacks of salt and meaningless placeholders, are part of the foundation upon which rests some much more important numbers:
The government's prediction, for example, that the crucial debt-to-GDP ratio will barely change by 2020-21, despite all the new spending and borrowing.
Ditto the other important budget forecast: that after hitting a high of $29.4 billion this fiscal year, the deficit will eventually drop to $14.3 billion by 2020-21.
The question, then: If all the funding data for 2018-19, 2019-20 and 2020-21 are just notional placeholders with little or no meaning, then how solid are the government's debt and deficit figures?
The answer: They are also, to a certain extent, notional, placeholding doses of salt.
'Not very transparent'
I asked Peter DeVries, a former senior official at finance who co-writes the authoritative blog 3D Policy, what he makes of all this.
"It's not very transparent at all," he replied. "In previous budgets, the fiscal chapters were quite a bit more detailed."
The data made public on Friday, he says, only deepens the budget's murkiness. Yes, the government provided funding projections going out to 2020-21, but it is impossible to assess them because the government has refused to provide the underlying spreadsheets. And, according to the finance official, it will continue to refuse.
Finance was left largely on the sidelines.— Peter DeVries, 3D Policy
DeVries has asked for more details.
"Somebody's going to have to offer a much better explanation than we have heard to date."
Officials at the Parliamentary Budget Office said they will be demanding further information, too.
For the record, the minister's spokesman, Daniel Lauzon, stated: "We, as a government, deeply respect the role and the work of the PBO … in every case, we are committed to raising the bar on openness and transparency."
Well, that's good, because the PBO experts are like honey badgers.
They never stop. They famously dogged the Harper government, at one point in court, and are prepared to take the same approach with this government.
DeVries reckons "the Prime Minister's Office had a heavy hand in drafting this budget, and that Finance was left largely on the sidelines, just as it was for so many years under Stephen Harper."
That makes sense. The initial effort to suppress budget data could only have come from the political echelon.
But governments can only juggle numbers and move the shells around for so long. In the end, as Paul Martin used to say, when he ran the finance department, it boils down to "irreducible mathematics."
The real question is whether this government is now headed toward a structural deficit; the sort that, once in place, can be hellishly intractable. People become entitled to their entitlements.
The Parliamentary Budget Office is trying to determine the answer to that right now, and expects to report in the days to come.
Stay tuned. We are talking here about Canada's central financial statement.
Justin Trudeau and his finance minister clearly want to put the best possible spin on their fiscal plans. And they have every right to take a rosy view.
But as the late American senator Daniel Patrick Moynihan famously put it, while you have the right to your own opinion, you don't have the right to your own facts.