Conservatives: Don’t worry, we’re going deeper into deficit

Julian Wolfe
November 19th, 2012

Finance Minister Jim Flaherty confirmed that Canada is in deeper economic trouble than anyone was willing to tell us. They didn’t want us to know how much they actually spent and they tried their best to hide the numbers, as the Auditor General pointed out last month, but as we crunch the numbers, we see that this government has spent more than any government in Canadian history.

For the second time in their mandate, after initially promising to never run a deficit, the Conservatives have announced that they have lost track of the numbers. Canada entered the recession with a deficit and now that the recession is gone, Canada is going deeper into deficit. Where, oh where, has the money gone?

In the simplest of terms, they spent and over spent. Stephen Harper once preached a model of smaller government, efficiency and reduced expenditure and that entire view went out the window once elected in 2006. The entire Canadian deficit can be attributed to a spending problem, a chronic one. Harper’s government is finding it easy to spend, spend more than any government has in history, but when it comes to making the cuts that count, they are unable as they now realize it would mean dismantling all that they have built.

The costly new prisons, the costly military contracts for sub-par military equipment, the advancement of a failed war on drugs, a $55 million budget for ads, brand new bills which are unnecessary and melt easily, an unnecessarily expensive G20 summit, the cost overruns of the wars in Libya and Afghanistan, the costs of adding new senators, the cost of abuse of “entitlements”, the cost in boosting the size of the PMO, the added costs to having a larger cabinet than any government in history, waste accumulating from the years (remember Bev Oda’s $16 orange juice?), interest, and the list goes on. The new deficit forecast sees Canada gaining a total of $151 billion and counting in debt. The previous Liberal government worked hard to pay down Mulroney’s debt and here is a rough estimate of how much new debt has been added by Harper. If this forecast remains consistent  that would mean that Canada would have a national debt of $636 billion, up from $452 billion in 2008.

Flaherty’s economic plan has been changing over time, each time announcing larger deficits than previously forecast and postponing the date for a return to balanced budgets. The sad part of the economic reality is that much of the deficit has been fueled by reckless Conservative spending that could have been avoided and cut. The list of Conservative expenditures is long and only going to get longer, meanwhile, they hide behind it to justify increasing the retirement age, the new toll that will be on the new Champlain bridge, the cuts to environmental safety, the cuts to the Canada Food Inspection Agency and firing of doctors and inspectors – one of the single reasons for the major meat recall not too long ago, the changes to Employment Insurance, and a list of forced amendments in the two omnibus budget bill that don’t cut expenditures but rather offload them to provinces that are already choking on what they already have to deal with.

This government isn’t fiscally conservative, not even close. Its problem is one of spending and a massive overhaul of their priorities and tactics will be needed in order to resolve the deficit in the timeline they outlined. However, given how limited and how unreliable the information that is made public actually is, there is no guarantee that the deficit will be $27 billion this year rather than $21 billion and not even higher.

The PBO is poised to take this government to court for the information that should be available to all MPs and all Canadian taxpayers. The money that is put into this system is ours, and not the Conservatives’ and as such they should have the respect to let us know how our finances actually are doing and take approaches to fix their mess – which was created before the world’s turmoil even began – rather than make painful announcements in Switzerland.

However, given the secrecy of this government, even towards its cabinet and own MPs, any decision Flaherty makes will be blindfolded, if he even gets to make them.

Again we must ask where the money went, again we must ask if the numbers we are given are reliable, again we must ask if the Conservatives even know what they are doing. As Flaherty tried to frame his announcement with a warning to the US congress, Canadians should not be gullible enough to believe that Flaherty’s management of our money depends on every decision of the United States. However, do be advised that the Conservatives will try every possible excuse in the book to appear credible while destroying Canada’s fiscal picture. They did so successfully in 2008, when Canadians first learned of the deficit, and somehow forgave them. The Conservatives inherited and squandered a $13 billion surplus and somehow convinced the masses that they were the party of the economy, and here we are, four years later, and instead of getting on track to better fiscal health, Canada is back down into a deficit trend. It is no wonder they tried so hard to hide how much they actually spend.

Do you believe in the numbers the government claims are the actual figures for Canada’s fiscal state? Do you think the Conservatives have repeated the history of Mulroney’s Progressive Conservatives in leaving behind an economy that is on the brink of collapse? How big of a clean up will the next government have to make before it can restore Canada to a good economic footing?

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   Categories: Bureaucracy, Economy, Employment Insurance, Featured, Government Mismanagement, Pensions, Retirement, Spending

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