At­tack ads fol­low bank rate cut

Cape Breton Post - - CANADA -

The Con­ser­va­tive gov­ern­ment tried to turn bad eco­nomic news to its po­lit­i­cal ad­van­tage as the Bank of Canada out­lined a less-thanrosy fi­nan­cial forecast for the rest of the year that could threaten the gov­ern­ment’s pledge to bal­ance the bud­get.

The cen­tral bank pro­jected the econ­omy would grow by just 1.1 per cent this year _ much lower than the 2.0 per cent that was ex­pected when the Con­ser­va­tives put to­gether their last bud­get.

If the bank’s dis­mal forecast comes to pass, the $1.4 bil­lion sur­plus pro­jected in the 2015 bud­get could well be­come a deficit, since fed­eral cof­fers would be $4.1 bil­lion slim­mer, ac­cord­ing to a sen­si­tiv­ity anal­y­sis in the April bud­get.

The op­tics of run­ning a deficit could be tricky for the Con­ser­va­tives as they head into an elec­tion tout­ing them­selves as the only party that could man­age fed­eral fi­nances in rough eco­nomic times. The gov­ern­ment could well be forced to find about $2 bil­lion in sav­ings to bal­ance the books, and raid the $1-bil­lion set-aside for con­tin­gen­cies.

The op­po­si­tion par­ties could also be forced to re­think their own cam­paign pledges if the fis­cal cup­board is bare.

Prime Min­is­ter Stephen Harper’s of­fice used the Bank of Canada’s an­nounce­ment Wed­nes­day to launch a po­lit­i­cal volley at the op­po­si­tion par­ties, say­ing in a state­ment that vot­ers shouldn’t take “un­nec­es­sary risks’’ by elect­ing any­one but the Con­ser­va­tives.

NDP critic Guy Caron said the gov­ern­ment’s for­mula for keep­ing the econ­omy hum­ming wasn’t work­ing.

“And the mes­sage from the gov­ern­ment is ‘ well, let’s stick with the for­mula that is not work­ing be­cause any­thing else would be more dan­ger­ous.’ It re­ally doesn’t make sense,’’ he said.

Lib­eral critic Scott Bri­son called the re­sponse from the Prime Min­is­ter’s Of­fice “an ab­di­ca­tion of lead­er­ship’’ from a gov­ern­ment with “no real eco­nomic plan, only po­lit­i­cal tac­tics.’’

Bri­son said the gov­ern­ment needs to give Cana­di­ans an up­date on fed­eral fi­nances so vot­ers and op­po­si­tion par­ties can make an in­formed as­sess­ment of the fis­cal sit­u­a­tion. He ar­gued the only rea­son the gov­ern­ment wouldn’t pro­vide such an up­date was if the Con­ser­va­tives wanted to hide the fact the fed­eral bud­get is still in a deficit.

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