Fresh outlook on the economy
Conservative balanced budget claim up for debate
If voters are keen on the idea of a balanced budget, the outlook is suddenly different for this fall’s federal election. The governing Conservatives had very much been banking on their feat of balancing the books this year. But it’s looking now like they’re being denied that claim.
A new analysis by the parliamentary budget office is forecasting the federal government will actually run a $1 billion deficit for 2015-16, rather than the $1.4 billion surplus the Conservatives said they expected. Calculations were based on projections by the Bank of Canada, which recently lowered its outlook for economic growth in 2015 to 1.1 per cent, down from 1.9 per cent earlier this year.
Forecasts for surpluses in 2016-17 and 201718 will also be more modest than expected, the PBO projects.
We could point to a number of factors for shrinking revenues, including the recently allotted child-care benefits that, according to critics, mostly benefit wealthier families.
Factors outside government control contributed. Oil prices plummeted – not entirely anticipated and thus having much to do with the Conservatives overly rosy forecasts.
But at the same time, budgetary forecasting shouldn’t take such a simplistic view of future economic performance – betting on one horse – because drops in commodities do happen.
It also shows how much this government was flogging the oil industry as its cash cow, rather than putting more promotion into other industries – let alone alternate forms of energy.
At any rate, when it comes to issues that help voters decide, some rise to the fore.
Will it be concerns about national security, for example, and how the current government has served the country? Possibly. But a predominant consideration, particularly during periods of a lethargic economy, is always which party do we feel will be the best to decide how to spend public money.
The Conservatives once commanded confidence in that area, but people will be less likely to find that the case now.
‘When it comes to issues that help voters decide, some rise to the fore.’