Baloney Meter: Did the federal Liberals inherit a $7.5-billion surplus?
Ever since the Liberals were sworn into office last Nov. 4, the Conservatives have used the monthly Fiscal Monitor published by the Finance Department to bolster their case that the new government inherited a budgetary surplus.
The Fiscal Monitor keeps a running tally of government expenditures versus revenues.
The November data showed that for the first eight months of fiscal 2015-16 — from April through November — the government's books were $1 billion in the black. By the time the February Fiscal Monitor was published last week, that surplus had grown to $7.5 billion through 11 months of fiscal 2015-16.
The Liberal budget of March 22, meanwhile, forecast a year-end deficit of $5.4 billion — suggesting that a staggering $12.9-billion turnaround would take place in the final month of the fiscal year.
The Conservatives pounced, asserting in the House of Commons this week that the Liberals "inherited a $7.5 billion Conservative surplus." The party even posted a Star Wars-themed meme riffing on the legend of Conservative surpluses being true.
So did the Liberals inherit a $7.5 billion surplus from the previous government?
WHAT THE EXPERTS SAY
Government spending in March is typically about $10 billion higher than February, said Jean-Francois Perrault, the Scotiabank chief economist who resigned in December 2015 from his post as assistant deputy minister of the economic and fiscal policy branch at Finance Canada.
"March always has a big jump in expenditures. It's a chronic thing, happens all the time," said Perrault. "As a result, you always have a pretty significant deterioration in the deficit — if it's a deficit — between the February and March results."
Kevin Page, the former parliamentary budget officer who currently holds a research chair at the University of Ottawa, said it's a mug's game to argue over a few billion dollars up or down on a $2 trillion economy and almost $300 billion in government spending.
THE VERDICT
Parsing who's responsible for what portion of a surplus or deficit that will be worth less than half a percentage point of GDP either way is "a tricky one," in Perrault's assessment.
It's a little like handing over the keys to a car in mid trip with half a tank of gas. If it arrives empty, or comes up short, who's at fault?
Driving the federal books $5.4 billion into the red this late in the year will be the Liberal government's responsibility, but that's not the same as saying they inherited a $7.5 billion surplus.
For those reasons, the Conservative assertion contains some baloney.
http://www.nationalnewswatch.com/20...inherit-a-7-5-billion-surplus-2/#.VyyDgXis_CS
Ever since the Liberals were sworn into office last Nov. 4, the Conservatives have used the monthly Fiscal Monitor published by the Finance Department to bolster their case that the new government inherited a budgetary surplus.
The Fiscal Monitor keeps a running tally of government expenditures versus revenues.
The November data showed that for the first eight months of fiscal 2015-16 — from April through November — the government's books were $1 billion in the black. By the time the February Fiscal Monitor was published last week, that surplus had grown to $7.5 billion through 11 months of fiscal 2015-16.
The Liberal budget of March 22, meanwhile, forecast a year-end deficit of $5.4 billion — suggesting that a staggering $12.9-billion turnaround would take place in the final month of the fiscal year.
The Conservatives pounced, asserting in the House of Commons this week that the Liberals "inherited a $7.5 billion Conservative surplus." The party even posted a Star Wars-themed meme riffing on the legend of Conservative surpluses being true.
So did the Liberals inherit a $7.5 billion surplus from the previous government?
WHAT THE EXPERTS SAY
Government spending in March is typically about $10 billion higher than February, said Jean-Francois Perrault, the Scotiabank chief economist who resigned in December 2015 from his post as assistant deputy minister of the economic and fiscal policy branch at Finance Canada.
"March always has a big jump in expenditures. It's a chronic thing, happens all the time," said Perrault. "As a result, you always have a pretty significant deterioration in the deficit — if it's a deficit — between the February and March results."
Kevin Page, the former parliamentary budget officer who currently holds a research chair at the University of Ottawa, said it's a mug's game to argue over a few billion dollars up or down on a $2 trillion economy and almost $300 billion in government spending.
THE VERDICT
Parsing who's responsible for what portion of a surplus or deficit that will be worth less than half a percentage point of GDP either way is "a tricky one," in Perrault's assessment.
It's a little like handing over the keys to a car in mid trip with half a tank of gas. If it arrives empty, or comes up short, who's at fault?
Driving the federal books $5.4 billion into the red this late in the year will be the Liberal government's responsibility, but that's not the same as saying they inherited a $7.5 billion surplus.
For those reasons, the Conservative assertion contains some baloney.
http://www.nationalnewswatch.com/20...inherit-a-7-5-billion-surplus-2/#.VyyDgXis_CS
