Parliament's budget watchdog warns: We're not as rich as we think!


Canada’s Parliamentary Parliamentary Budget Office is warning all political parties that while the federal treasury is about to overflow with billions in surpluses, any major tax cuts or new spending programs could plunge the country back into deficit.

But with political silly season upon us in advance of the 2015 general election, it’s unlikely the three major parties are going to pay much heed to this warning.

The PBO said Tuesday  [pdf] federal coffers will spill over with more than $53 billion in surpluses between now and the spring of 2020 but those riches are mostlyf from one-time benefits like the sale of government assets and an economy temporarily growing faster than expected.

“Policymakers should be wary of using surpluses to implement permanent tax relief or spending initiatives if they wish to avoid returning to deficits as economic growth subsides,” the PBO said.

Already, though, all three parties have their eye on that surplus and hope to use it to win votes in the general election to be held next fall.

The cost of implementing the tax cuts the Harper government promised during the 2011 election campaign will eat up about $20-billion of that surplus, according to a recent report by the TD Bank. (That report [pdf], incidentally, said the combined surplus through to 2020 will be more than $70 billion, much bigger than the PBO’s forecast).

Among other things, the Conservatives have promised to bring in an income splitting scheme for couples with children; will double the amount that can be put into tax-free savings account; and will let adults do what they can now do for their kids — write off the cost of gym memberships and other physical activities.

Thomas Mulcair’s NDP would boost health care transfers to the provinces by $6 billion a year and would bring in a national daycare program that would not cost parents more than $15 a day per kid. Those two items alone would eat up $24 billion through to 2020.

Justin Trudeau’s Liberals have been less specific about what they’d do beyond opposing some of Harper’s tax cuts and spending more on infrastructure.

The non-partisan PBO puts in a pitch to campaigning politicians to provide detailed plans of how they plan to manage Ottawa’s books over the next several years.

“It would be good practice if policymakers commit in advance to the allocation of potential surpluses between debt reduction, tax reductions, or spending increases.”

One thought on “Parliament's budget watchdog warns: We're not as rich as we think!”

  1. the way I heard it Harper was hiding in the closet when the guns started shooting Baird screamed so loud Harper fainted the conservative caucus kicked the NDP out the front door of the house right on the lawn then the other foot dropped Harper misjudged the amount of money we had at the end of this year he forgot to pay his American spin doctors for all the BS they pout out on Justin and they also have to pay Omar a couple of hundred million and if Jason Kenny keeps up his yapping he may have to pay more.

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