Stand­ing Up to Un­con­trolled Spend­ing

The Drumheller Mail - - REAL ESTATE - Kevin Soren­son M.P. Bat­tle River-Crow­foot Con­stituency

This week, the Lib­eral govern­ment in Ottawa’s Fi­nance Min­is­ter Bill Morneau con­firmed that the Lib­eral’s will bor­row more than $18-bil­lion dol­lars to fi­nance their spend­ing prom­ises in 2016. Dur­ing the past elec­tion, the Lib­er­als promised that they would not bor­row more than $10-bil­lion in 2016. We now know that the Lib­er­als plan to break a sig­nif­i­cant elec­tion prom­ise: they plan to bor­row even more than ten bil­lion dol­lars this com­ing year.

“The Lib­er­als in­her­ited a bal­anced bud­get be­cause of good Con­ser­va­tive eco­nomic man­age­ment. They blew their bud­get in less than 100 days solely be­cause of their own new and un­con­trolled spend­ing. They can’t blame mas­sive new bor­row­ing and run­away spend­ing on a slow­ing econ­omy or a fic­tion that the bud­get wasn’t al­ready bal­anced when they took of­fice,” said Con­ser­va­tive In­terim Leader Rona Am­brose.

The Lib­er­als have no re­spect for tax­payer’s money. They are con­sciously ig­nor­ing the fact that no mat­ter how much money they bor­row, it has to be paid back. Cana­di­ans can­not ig­nore the re­al­ity that bud­gets don’t ac­tu­ally bal­ance them­selves. The Fi­nance Min­is­ter’s an­nounce­ment in­cluded his ad­mis­sion that there will be larger than ex­pected deficits over the next two years. As well, the $18 bil­lion deficit al­ready fore­cast for this year does not in­clude bil­lions of dol­lars more that are promised to be listed in the bud­get, which will be tabled on March 22.

This is reck­less, ir­re­spon­si­ble, and en­tirely the re­sult of the Fi­nance Min­is­ter not be­ing able to make the hard de­ci­sions. Hard de­ci­sions would have in­cluded a strong and com­pe­tent Fi­nance Min­is­ter in­sist­ing that the Lib­er­als back-off on some of their elec­tion prom­ises, given the sud­den down­turn in oil prices and ac­com­pa­ny­ing de­te­ri­o­rat­ing eco­nomic con­di­tions.

The Con­ser­va­tive Party con­tin­ues to be the voice of tax­pay­ers in Par­lia­ment and we are hold­ing them ac­count­able for their run­away spend­ing of bil­lions of tax­payer dol­lars. The mas­sive amounts of spend­ing they are de­ter­mined to make will lead to waste and mis­man­age­ment of th­ese funds and risk built-in struc­tural spend­ing re­quire­ments. All that Cana­di­ans are go­ing to get from this Lib­eral govern­ment is big­ger govern­ment.

Over the next three years, th­ese huge multi-bil­lion an­nual bud­getary deficits will be added to the ac­cu­mu­lated na­tional debt. This debt load will be left for Cana­dian tax­pay­ers and fu­ture gen­er­a­tions to pay off. The debt in­curs mas­sive in­ter­est pay­ments un­til they are paid off.

When it comes time to pay all this bor­rowed money back, the only re­al­is­tic way they will be able to do it is through higher taxes. We al­ready see it, as they roll back Tax-Free Sav­ings Ac­counts and look to hike job-killing pay­roll taxes. They have also promised a Car­bon tax.

To­ward the end of their man­date and just be­fore the next elec­tion, the Lib­er­als will be look­ing for sym­pa­thy from vot­ers and ask­ing for a se­cond chance. That is when they will likely an­nounce a rise in the Goods and Ser­vices Tax (GST).

As the Of­fi­cial Op­po­si­tion in the House of Com­mons – the govern­ment in­wait­ing - we will con­tinue to fight for jobs, lower taxes and for keep­ing fed­eral spend­ing un­der con­trol.

Morneau said the govern­ment will post a smaller than pro­jected deficit of $2.3 bil­lion for 2015-16, down from the $3-bil­lion deficit pro­jected in Novem­ber’s fall fis­cal up­date.

But that deficit will bal­loon to $18.4 bil­lion in 2016-17 and $15.5 bil­lion in 2017-18 — and that is be­fore any new spend­ing Morneau out­lines in the March bud­get. Those num­bers are dras­ti­cally dif­fer­ent from the $3.9-bil­lion and $2.4-bil­lion short­falls fore­cast just three months ago.

“A less am­bi­tious govern­ment might see th­ese con­di­tions as a rea­son to hide, to make cuts or to be overly cau­tious. But our govern­ment might see that the eco­nomic down­turn makes our plan to grow the econ­omy even more rel­e­vant than it was a few short months ago,” Morneau said.

“We’re not con­sid­er­ing any tax changes at this time,” the fi­nance min­is­ter said when asked whether the govern­ment would con­sider rais­ing gen­eral con- sump­tion taxes.

The re­vised two-year eco­nomic and fis­cal out­look takes into ac­count sharp de­clines in crude oil prices since the fall up­date and con­tin­ued un­cer­tainty in the global econ­omy.

Morneau said pri­vate sec­tor econ­o­mists now ex­pect crude oil prices (for West Texas In­ter­me­di­ate) to av­er­age $40 US per bar­rel in 2016, down from $54 per bar­rel ex­pected in the fall up­date. He said the cur­rent price stands at $31.50 per bar­rel.

Econ­o­mists have also re­vised real gross do­mes­tic prod­uct growth for Canada to 1.4 per cent in 2016, down from two per cent growth fore­cast in the fall up­date. The GDP growth for 2017 re­mains un­changed at 2.2 per cent.

To­day’s fis­cal up­date in­cludes a $6 bil­lion a year con­tin­gency — dou­ble the $3 bil­lion Ottawa used in past pro­jec­tions.

‘No fis­cal an­chor,’ Am­brose says

The fed­eral fi­nance min­is­ter blamed the weak econ­omy on the pre­vi­ous Con­ser­va­tive govern­ment.

“Af­ter 10 years of weak growth, Band-Aid so­lu­tions, and in­ac­tion from the pre­vi­ous govern­ment, Canada’s econ­omy was sim­ply too vul­ner­a­ble when faced with a com­bi­na­tion of the drop in oil prices and eco­nomic un­cer­tainty around the world,” Morneau said in Ottawa Mon­day.

In­terim Con­ser­va­tive Leader Rona Am­brose fired back call­ing into ques­tion the com­pe­tence of the new Lib­eral govern­ment, blam­ing the soar­ing deficit on “un­con­trolled, per­ma­nent, new spend­ing.”

“I find this reck­less, ir­re­spon­si­ble and it’s en­tirely the re­sult of the fi­nance min­is­ter and the prime min­is­ter not be­ing able to make the de­ci­sions that they need to make to­day to re­spect tax­pay­ers’ money,” Am­brose said on Par­lia­ment Hill.

Morneau said the Lib­er­als will fo­cus on mak­ing in­vest­ments in in­fra­struc­ture, in­no­va­tion, mea­sures to help the middle class and the coun­try’s most vul­ner­a­ble.

“We were elected to a fun­da­men­tally new ap­proach to grow­ing our econ­omy. We said to Cana­di­ans that a time of low-eco­nomic growth the right thing to do is make in­vest­ments in the econ­omy,” Morneau said in Ottawa Mon­day.

“The wrong thing to do would be to make cuts.”

But Am­brose was crit­i­cal of the govern­ment’s plan, call­ing it “a recipe for waste and mis­man­age­ment.”

“There’s no fis­cal an­chor left in this govern­ment,” she said Mon­day af­ter­noon.

BMO warns against fis­cal boost

A new anal­y­sis by the Bank of Mon­treal cau­tions the fed­eral govern­ment against “an overly ag­gres­sive fis­cal boost.”

“Ottawa can clearly af­ford a mod­er­ate fis­cal boost, with­out do­ing last­ing dam­age to the long-term debt out­look,” BMO econ­o­mists Dou­glas Porter and Robert Kav­cic said in a spe­cial re­port pub­lished to­day.

“How­ever, there are plenty of rea­sons why Ottawa does not have a free hand to spend on ev­ery pri­or­ity, and must main­tain dis­ci­pline.”

Weaker than ex­pected growth due to low com­mod­ity prices and pro­vin­cial debt are some of the rea­sons the econ­o­mists say, “Ottawa should pro­ceed with pru­dence.”

Prime Min­is­ter Justin Trudeau has al­ready said his govern­ment will not be able to keep an elec­tion prom­ise to keep deficits un­der $10 bil­lion for the next bud­get year, and has backed away from a prom­ise to bal­ance the bud­get by the end of his four-year man­date.

The Lib­er­als now say they will keep Canada’s debt to GDP on a down­ward tra­jec­tory, though Mon­day’s num­bers sug­gest they may only nar­rowly meet that prom­ise in the next two years.

If you have any ques­tions or con­cerns re­gard­ing this or pre­vi­ous col­umns you may write me at 4945-50th Street, Cam­rose, Al­berta, T4V 1P9, call 780-6084600, toll-free 1-800-6654358, fax 780-608-4603 or e-mail Kevin.Soren­son.c1@ parl.gc.ca.

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