DEFICIT DREAM­ING

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Look­ing back, it’s rea­son­able to call Justin Trudeau’s cam­paign pledge to run “mod­est” deficits as a des­per­a­tion, Hail Mary pass.The Lib­er­als were the third party when the 2015 cam­paign be­gan and stayed there for the first half of the long elec­tion cam­paign.The mo­men­tum was with NDP leader Tom Mul­cair, and early on Trudeau had failed to dif­fer­en­ti­ate him­self.Then some­thing strange hap­pened. As Stephen Harper and Mul­cair nod­ded in agree­ment at the mer­its of balanc­ing the books — and to this day we be­lieve the NDP leader made the right com­mit­ment — Trudeau de­cided to try some­thing dif­fer­ent.The then Lib­eral leader promised to run three years of mod­est deficits, no more than $10 bil­lion per year, to jump-start the econ­omy. These would help pay for what he was sell­ing as a his­toric in­vest­ment in in­fra­struc­ture across the coun­try.That helped turn Trudeau’s prospects around, and his num­bers started to climb.Not so much be­cause of pledg­ing red ink, but be­cause the idea of giv­ing the econ­omy a boost ap­pealed to Cana­di­ans wor­ried about their eco­nomic fu­ture. Nice idea, we sup­pose, but the num­bers are now in and it looks like Trudeau’s orig­i­nal com­mit­ment to Cana­di­ans has failed to de­liver.His promise re­sulted in few in­fra­struc­ture projects of note, even though Trudeau’s Lib­eral gov­ern­ment vastly in­creased the deficits they orig­i­nally promised — a pro­jected $19 bil­lion in 2018-19, not the $5.7 bil­lion Trudeau pre­dicted. There were sim­i­lar, mas­sive misses in pre­vi­ous years.As wor­ri­some, there isn’t a com­plete tally of how in­fra­struc­ture money was spent or what it ac­com­plished.And the Par­lia­men­tary Bud­get Of­fi­cer es­ti­mates the ac­tual stim­u­lus these tens of bil­lions in bor­rowed cash gen­er­ated amounts to just 0.16-per-cent growth in GDP, or just un­der $2 bil­lion an­nu­ally.Our econ­omy would have been bet­ter off leav­ing the money in Cana­di­ans’ pock­ets and let­ting them use it for sav­ings or con­sumer goods. Now there are re­ports In­fra­struc­ture Min­is­ter Fran­cois-philippe Cham­pagne is rush­ing to spend bil­lions more on projects this year, just be­fore the elec­tion, to have some­thing to show for Lib­eral deficits.Maybe in­stead they should re­assess their long-stand­ing mis­guided no­tions that we can spend our way into pros­per­ity and let bud­gets bal­ance them­selves.It wasn’t true in 2015 and it’s not true now.

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