Wednesday, December 06, 2023
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We all know 2009 was a bad year for the global economy. Canada went into deficit for the first time in a dozen years. And it all happened so fast. Back in October 2008, the finance minister was saying this: "We've kept our country on an even keel and we do not have a deficit." By May of '09, Jim Flaherty was projecting the largest deficit in our history - more than ? billion dollars this fiscal year.
A few months later, that projection went up again - fifty-six billion dollars in the hole. Now, the government says that's largely because of all the spending it did to jumpstart the economy, and it says we should be almost out of the red by 2015.
But Kevin Page disagrees. Page is the parliamentary budget officer. The Harper government created his job, but Page has a strong independent streak. He says that even when the economy recovers, Canada will have something called a "structural" deficit of nineteen billion dollars. Basically, year-to-year, Page says the government doesn't have enough revenue coming in to cover expenses. He says a big reason is tax cuts.
For example, because the government cut the GST from seven per cent to five per cent, it's lost twelve billion dollars a year in revenue. So, there's a budget gap. Page released one report on this, last fall. Now, he's put out a new report - refusing to let the shutdown of Parliament shut him down.
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