Morneau defends need for string of deficits

ECONOMY Spars with Tory critic Raitt in Commons

• There’s no argument that Canada is facing multibillion- dollar shortfalls over the next half-dozen years, at least.

What is in dispute, or so politicians would have it appear, is who’s to blame for getting the country back into the red in the first place — the outgoing Conservatives or the newly elected Liberals?

“On Friday, Finance Canada confirmed what we always said would happen, that the government took a Conservative surplus and turned it into a Liberal deficit,” Lisa Raitt, the Conservative finance critic, told the House of Commons during Question Period on Monday. “We know how this works. They had the best March madness ever. It was fantastic.”

Finance Minister Bill Morneau shot back: “The facts matter.”

Morneau acknowledged that his March 22 budget would be t he launching point for a string of deficits — beginning in the current fiscal 2016-17 — to fund infrastructure projects and stimulate economic growth.

“The government before us left us with a deficit. What they will find is that, as with previous years, revenues go down and expenses go up at the end of the year,” he said during Question Period. “When you take out the measures that we’ve put in, what you find is that the previous government ( still) left us with a deficit.”

Morneau’s comments followed last week’s report from the Finance Department that showed the country ended fiscal 2015-16 with a smaller deficit than previously forecast — and not with a surplus, as the former Conservative government has argued.

The Fiscal Monitor, which officially tracks federal finances, estimates that last year’s shortfall was $ 1. 9 billion — although that is still much smaller than the $ 5.4- billion deficit forecast in the Liberal budget.

Even so, the final budget tally may not be known for months to come, given the time lag in receiving revenues and calculating expenditures.

Morneau has argued that the expenses side of the ledger traditionally rises at tail end of the year. In fact, the Fiscal Monitor still showed a surplus of $ 7.5 billion in February. But that quickly changed i nto a negative reading.

Regardless, the minister told Parliament that the Liberals “will make a real difference for Canadians in the future — improving our country through improved growth.”

Morneau had a second encounter with lawmakers on Monday, going before the House of Commons fi- nance committee to discuss Bill C-15, the government’s Budget Implementation Act — which includes measures to reduce the federal income tax for middle-class families.

The bill will also “enhance” t he Employment Insurance program “so that out-of-work Canadians have the support they need while they look for their next job,” he told the committee.

“I would particularly like to highlight that passage of the bill will extend EI regular benefits by five weeks to all eligible claimants in regions of the country that have experienced the sharpest and most severe increases in unemployment,” Morneau added.

WE KNOW HOW THIS WORKS. THEY HAD THE BEST MARCH MADNESS EVER.