Fresh out­look on the econ­omy

Con­ser­va­tive bal­anced bud­get claim up for de­bate

Cape Breton Post - - NEWS | EDITORIAL -

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.’

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