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GOLDSTEIN: Trudeau experienced deficits differently
Lorrie Goldstein
July 27, 2019
July 27, 2019 9:15 PM EDT
Prime Minister Justin Trudeau participates in a joint press conference during the Canada-E.U. Summit in Montreal on July 18, 2019.Sebastien St-Jean / AFP / Getty Images
The federal government’s latest statement of its finances indicates, yet again, that contrary to Prime Minister Justin Trudeau’s financial philosophy, budgets do not balance themselves.
According to the finance department’s Fiscal Monitor released Friday, the Trudeau government recorded a $1.4 billion deficit for the first two months of the current fiscal year of 2019-20, meaning April and May.
This on its way to a $19.8 billion deficit for 2019-20, according to Trudeau’s March 19 budget.
That flies in the face of Trudeau’s promise to Canadians during the 2015 election campaign that his government would have a balanced budget with a $1 billion surplus this year.
As Trudeau dramatically pledged to Canadians during a televised leaders’ debate on the economy in 2015:
“I am looking straight at Canadians and being honest the way I always have. We’ve said we are committed to balanced budgets and we are. We will balance that budget in 2019.”
In retrospect, this appears to be an early example of Liberal political philosophy — as elegantly expressed by Environment Minister Catherine McKenna’s at a pub in St. John’s in May — that, “if you repeat it, if you say it louder, if that is your talking point, people will totally believe it.”
Back in the real world, the latest Fiscal Monitor confirms Trudeau doesn’t have a revenue problem, he has a spending problem.
For the first two months of this fiscal year, revenues were up $2.3 billion, or 4.2%, compared to last year, mainly due to higher tax revenues.
However, expenses were up $6.3 billion, or 13.5%, and public debt up by $600 million, or 13.3%.
This leaves the Trudeau government in worse financial shape than it was during the first two months of the previous fiscal year (2018-19) when it recorded a $3.2 billion surplus on its way to a year-end $14.9 billion deficit, compared to the $5.7 billion deficit Trudeau promised for that year in the 2015 election.
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Also in the 2015 election, Trudeau promised a $9.5 billion deficit in the 2017-18 fiscal year which ended up as a $19 billion deficit.
In 2016-17, Trudeau’s government also recorded a $19 billion deficit, compared to the $9.9 billion he promised in 2015.
Then Conservative prime minister Stephen Harper, knew what was coming in 2015 after adding up the cost of Trudeau’s election promises, mocking Trudeau’s claim of three years of “modest” deficits followed by a balanced budget in 2019-20.
Pinching his fingers together at an election rally, Harper said sarcastically:
“(Trudeau) says a modest deficit, a tiny deficit, so small you can barely see the deficit. Three modest little deficits We’ve gone through this before — look at the mess in Ontario with the modest deficits of the Liberal government. I guess it turns out the budget doesn’t balance itself after all.”
In fairness, Trudeau’s predicted $19.8 billion deficit for this fiscal year contains a $3 billion reserve fund and the Liberals have always inflated their projected deficits in their budgets so they can say they beat their targets at the end of the year.
Then again, the Liberals have an election to buy in October by bribing us with our own money, so anything could happen.
In any event, having abandoned his broken 2015 election promise to balance the budget this year, Trudeau now says that if he wins the October election, he’ll record deficits every year for the four-year term of his second electoral mandate.