Morneau warns of Scheer’s cuts
OTTAWA • Finance Minister Bill Morneau on Monday used a three-year-old video to paint Andrew Scheer as a Conservative leader who would impose “painful cuts” to public spending if he wins the October election, part of a string of attacks by Liberal Cabinet members in recent weeks.
On Monday, Morneau posted a 2016 video to Twitter that showed Scheer talking about his plans to balance the budget if he ever formed government. Scheer at one point suggests that past Conservative governments had made the mistake of proposing spending cuts with a “hardedged tone,” and said future leaders should be more “careful” about how the convey such retrenchment.
The finance minister claimed Scheer had been “caught telling a private meeting of Conservatives” about his plans to cut spending, while also detailing his intention to “hide” those very plans from voters. “This is what Conservative politicians do,” Morneau said in a separate tweet, claiming they would cut services for average Canadians.
But the video is from a September 2016 Conservative candidate forum that was widely shared on public platforms including Facebook. In it, Scheer spoke about the need to balance budgets, primarily by not “spending the money in the first place.”
“When it comes to making tough decisions and cuts, I agree that it’s something that’s very important,” he said. “But we also have to be very, very careful how we communicate that to people.”
A spokesperson for Scheer suggested the video editing released by Morneau was highly misleading. The Liberals removed a sentence in the middle of Scheer’s response that appears to address Ottawa’s spending under Morneau, according to a full version of the video on Facebook.
“One of the best ways to get out of a hole is stop digging, and not inventing new ways of spending money,” Scheer had said, in an apparent reference to Morneau’s fiscal policy.
“This is just more desperation from Justin Trudeau and his Liberals,” said spokesperson Simon Jefferies. “They want to talk about anything other than their record, and they will lie to Canadians again and again.”
The tweet by Morneau underscores an attempt by the Liberal Party to strategically run deficits ahead of the federal election, then frame any plans to return to balance as an act of “austerity” that threatens voter livelihoods. It also taps into the anxieties of some voters, who fear budget cuts for crucial social services.
Industry Minister Navdeep Bains echoed Morneau’s comments Monday, saying Canada “can’t cut its way to prosperity.”
Prime Minster Justin Trudeau promised in 2015 to run a $10-billion deficit in his first budget, which he would bring back to balance by 2019. The party almost immediately abandoned those plans, running deficits nearly twice that size, and scrapping plans to return to surplus.
Scheer had initially promised to balance the budget in two years if the Conservatives formed government, but quickly abandoned those plans in May this year, extending the timeline to five years.
The party has not explicitly said how it would return the budget to balance, besides scrapping the $35-billion Canada Infrastructure Bank, among a few other things.
Economists over the past four years widely agreed that Ottawa should have trimmed its fiscal spending measures, particularly in 2017 when its economy was running near full capacity.
Sean Speer, a former economic advisor to Stephen Harper, said Morneau likely continued to run deficits largely as a marketing exercise.
“The government’s fiscal policy is not motivated by considerations about the business cycle or the proper fiscal strategy,” Speer wrote recently for the Macdonald-Laurier Institute. “Mr. Morneau’s ongoing deficit is not about policy. It is about politics. His government has sought to weaponize deficit spending as a political tool.”
Observers say Ottawa has repeatedly run sizable deficits despite a windfall in revenues, which could have helped narrow its fiscal gap. Ottawa ran a $15-billion deficit in 2018-19, for example, even after seeing a $3.1-billion surplus over the first 11 months of the year, due mainly to higher revenues.