The House

Balanced budget legislation: is it about policy or politics?

Joe Oliver has already promised his first budget -- coming up in less than two weeks -- will be balanced. Now the Finance Minister also wants to force future governments to keep their books in the black. Is balanced budget legislation good policy, bad policy, or purely about politics? Former PBO Kevin Page weighs in.
Finance Minister Joe Oliver speaks to the media at the Canada Goose factory while announcing the date of the federal budget in Toronto on Thursday, April 2, 2015. THE CANADIAN PRESS/ (Nathan Denette/Canadian Press)

The timing raises a number of questions.

With just months to go before a federal election and after running seven consecutive deficits, the Finance Minister is now promising to introduce balanced budget legislation. Joe Oliver also happens to have a budget, one he's already said will be balanced, coming up in less than two weeks.

Is that a smart policy move? Or is it purely about politics?

The eight provinces that passed similar legislation have a track-record of bending, breaking, or repealing the rules.

As part of the legislation Oliver described:

  • Deficits only in response to a recession or "extraordinary circumstance, that is, war or natural disaster, with a cost exceeding $3 billion in a year."
  • A requirement for the finance minister to testify before the Commons finance committee within 30 days of a published deficit to present a plan and "concrete timelines" to return to balanced budgets.
  • A freeze on operating spending and a five per cent wage freeze for cabinet ministers and deputy ministers, following a published deficit.
  • An automatic operating freeze if a finance minister posts a deficit outside of these "extraordinary circumstances."

Former Parliamentary Budget Officer Kevin Page argues this is all about politics. Page tells The House's Evan Solomon that: "To make this the law of the land, it's a political decision."

Page also discusses what he expects to see when Joe Oliver tables his first budget on April 21.

Oliver set to table balanced budget legislation

Politics

6 years ago
5:04
Finance Minister Joe Oliver announced that the government intends to table balanced budget legislation. 5:04

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