If only the Conservatives had listened to his calls for restraint last year, Liberal Finance Critic John McCallum lamented this week, the federal deficit would not be so large as it is today. What Mr. McCallum neglected to point out is that it is partly because the government listened to the Liberals this year that it now faces a projected $50-billion shortfall.
It is entirely fair for the opposition parties to criticize the inability of Jim Flaherty, the Finance Minister, to deliver a consistent message on the condition of the federal financial statements. Had Mr. Flaherty been more forthright about the inevitability of a deficit in last November's fiscal update, and more accurate in his projection of that deficit's size in his January budget, it would be easier to have confidence in his fiscal management.
The opposition, however, is going further. Yesterday, Michael Ignatieff, the Liberal Leader, pronounced that there is "not a single Canadian" who believes the government's claim that the deficit will be short-lived. The subtext of his criticism, and those of Mr. McCallum and other Liberals, is that the large deficit is inherently a bad thing.
Yet, before Mr. Flaherty's budget, which the Liberals supported, they were busy jostling with the New Democrats for credit for the tens of billions of dollars in deficit spending the government was set to announce.
"Finally, this government is talking about a real stimulus, which is what other countries have been doing for months," Mr. McCallum pronounced triumphantly last December, after a meeting with Mr. Flaherty at which he impressed upon him the need for such spending.
Indeed, the very willingness to plunge the country further into deficit was what - in addition to abandoning its plan to eliminate subsidies to political parties - saved the government from being defeated by the opposition.
The Liberals, at least, now have the good sense not to simultaneously complain about the deficit and call for another sweeping round of stimulus spending, as the NDP is doing. Mr. Ignatieff's party has for the time being limited its fresh demands to a loosening of employment-insurance eligibility requirements, which itself would nevertheless add to the deficit. But they are not suggesting that any of the money that was allocated in January should be rolled back, even though it increasingly appears that many of the "stimulus" funds will not be spent until the economy has begun to rebound from the recession.
(Nor, for that matter, are the Liberals calling for an increase to the GST - the reduction of which, they have accurately complained, eliminated much of the federal surplus before the economic crisis began.)
The size of the deficit is neither unique nor indefensible in the current economic climate, which governments of all stripes have attempted to spend their way out of. But if it is larger than it needs to be, it was a group effort that made it so.Report Typo/Error