Balanced budget legislation: is it about policy or politics?
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.