The hand-wringing or (in opposition circles) schadenfreude over whether the Harper government’s nascent budget surplus is disappearing before its eyes is a colossal waste of time.
It matters not a whit whether Ottawa spends a few billion dollars more or less than the nearly $300-billion in tax revenues it will take in next year. Prime Minister Stephen Harper and Finance Minister Joe Oliver might rather eat glass than admit that falling oil prices have put their surplus in jeopardy. But the truth is that even if Ottawa stays in the red, it would be by a toe, not a leg.
What matters is whether Ottawa’s financial obligations are sustainable over time. Has the federal government put its fiscal house sufficiently in order to ensure that it can meet its responsibilities for years to come without dramatically raising taxes or slashing spending? The answer is overwhelmingly yes, as the Parliamentary Budget Officer has repeatedly noted.
“The federal government has fiscal room to meet all the challenges of aging demographics under current policy,” according to the PBO’s latest Fiscal Sustainability Report. “It could increase spending or reduce taxes while maintaining sustainable public debt.”
Of course, one way Ottawa has ensured the sustainability of its own finances has been by avoiding making open-ended commitments to the provinces. The federal government will transfer a record $67.9-billion in cash to provincial and territorial governments in 2015-16 – a two-thirds increase since the Tories took office in 2006. But it has capped its future liabilities.
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How Ontario’s squeezing other have-nots - The Globe and Mail
It matters not a whit whether Ottawa spends a few billion dollars more or less than the nearly $300-billion in tax revenues it will take in next year. Prime Minister Stephen Harper and Finance Minister Joe Oliver might rather eat glass than admit that falling oil prices have put their surplus in jeopardy. But the truth is that even if Ottawa stays in the red, it would be by a toe, not a leg.
What matters is whether Ottawa’s financial obligations are sustainable over time. Has the federal government put its fiscal house sufficiently in order to ensure that it can meet its responsibilities for years to come without dramatically raising taxes or slashing spending? The answer is overwhelmingly yes, as the Parliamentary Budget Officer has repeatedly noted.
“The federal government has fiscal room to meet all the challenges of aging demographics under current policy,” according to the PBO’s latest Fiscal Sustainability Report. “It could increase spending or reduce taxes while maintaining sustainable public debt.”
Of course, one way Ottawa has ensured the sustainability of its own finances has been by avoiding making open-ended commitments to the provinces. The federal government will transfer a record $67.9-billion in cash to provincial and territorial governments in 2015-16 – a two-thirds increase since the Tories took office in 2006. But it has capped its future liabilities.
more
How Ontario’s squeezing other have-nots - The Globe and Mail
