What should the government's priorities be with the coming budget surplus?
The nation's finances: In this week's fiscal update Finance Minister Joe Oliver says the government is on track for a budget surplus ...but there won't be enough for expensive new programs. Critics say there are some new initiatives more important than balancing the budget. What do you think?
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In the fiscal update presented last week by Finance Minister Joe Oliver, he confirmed the government was on track to a budget surplus next year ...but he poured cold water on the idea that anyone should think of it as an opportunity to create costly new federal programs. That's because the projected surplus is much smaller than originally thought. Why? Well, the government itself recently announced a whole array of tax reduction measures -- costing more than $5-billion -- targeting small businesses, families and children. It led to accusations that the government was emptying the kitty before the election to block the other parties from making expensive election promises.
A federal government in surplus is uncommon enough that all parties naturally jump at the chance to further their priorities with the extra money available. Both the Liberals and the NDP have suggested before that the focus on balancing the budget is misplaced when there are so many other important needs in Canada ...such as infrastructure, education, health, job creation etc. ..the point being that such programs are worth the government going into debt. Do you agree?
The Finance Minister stressed that the world economy is not robust ...and Canada, despite doing well, would be prudent to play it safe. Europe is shaky. There's war brewing in Ukraine and Iraq. China's economy has slowed. The U.S. is not improving as fast as hoped. And world oil prices are dropping ...something that directly affects Canada.
How significant is a surplus? In the last 50 years Canada has been in deficit far more than in surplus. The last time Canada was in surplus was 2007 ...just before the great recession hit a year later.
Does the state of Canada's finances give you confidence in the midst of global uncertainty?
There are many stories and events in the news that have a bearing on the world economy and Canada's economic well-being ...both positively and negatively. From conflicts in the Middle-East and Ukraine, to the dropping oil prices, to potential trade deals with Europe and the Pacific Rim countries. What dangers or benefits do some of these things hold for Canada?
Our question today: "What should the government's priorities be with the coming budget surplus?"
I'm Rex Murphy ...on CBC Radio One ...and on Sirius XM, satellite radio channel 169 ...this is Cross Country Checkup.
President and CEO of the Toronto Financial Services Alliance, former Ontario Finance Minister.
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