The Conservative government will release the official budget numbers for last year just ahead of the Oct. 19 federal vote, providing Stephen Harper with some positive news amid growing signs that the Prime Minister’s forecasts for this year are crumbling.
The Globe and Mail has learned that Finance Minister Joe Oliver approved a special order just before the launch of the election campaign that grants Finance Canada the authority to publish the final bottom line for 2014-15 during the campaign.
The reports are normally released each year late September or October, but it had not been clear until now how the election might affect that schedule. Departments face strict restrictions on communications during campaigns.
A source confirmed to The Globe that Mr. Oliver gave the department permission to release the figures as soon as they are ready. Though the 2014-15 fiscal year ended on March 31, it takes several months for departments to make year-end accounting adjustments and then have the final numbers approved by the Auditor-General.
The source said the final bottom-line numbers for 2014-15 are not currently known. However, the Parliamentary Budget Officer has said they will likely show a small surplus. Should that prove accurate, it would mean that the Conservatives ran six consecutive deficits before returning to surplus. Both the NDP and Liberals have regularly accused the Conservatives of running eight consecutive deficits based on the assumption that both 2014-15 and the current year would show deficits.
Mr. Harper initially promised in the 2011 election campaign that he would balance the budget by 2014-15, but his government later pushed back that target by a year.
The Parliamentary Budget Officer released figures on April 28 that projected Ottawa would in fact show a surplus of $1.8-billion in 2014-15. The next month, Finance Canada released its monthly fiscal monitor report that showed a 2014-15 surplus of $2.9-billion, but cautioned that year-end adjustments would likely lead to final numbers that show a “small” deficit.
Economists say it is of little consequence whether federal finances are in a small deficit or small surplus, but the management of federal finances is at the centre of the political debate in this campaign.
It is not clear whether the Conservatives plan to use the release of the figures to boast about a small deficit or even an early surplus given the worsening state of federal finances this year, driven by persistently low oil prices and slower-than-expected economic growth.
The Conservatives did set a precedent for releasing such figures during the 2008 election, which also featured an October voting day. Finance Canada simply released the figures but did not include a news release or quotes from the minister, as would normally be the case when the release occurs outside of a campaign. However, the political debate at that time was more about future budget numbers in light of the global financial crisis that was gaining momentum.
Alan Freeman, a former assistant deputy minister of communications at Finance Canada who is now a senior fellow with the University of Ottawa, said the Conservatives must see an advantage in releasing the figures.
“They obviously see some benefit in making this public,” Mr. Freeman said. “They might figure that the public will even be confused about what year they’re talking about.”
All government departments are under strict orders to curtail their announcements during an election campaign. Any exceptions must be approved by the Privy Council Office and announcements can’t include any partisan information.
Mr. Oliver’s April 21 budget is based on several key economic assumptions that have not materialized. The biggest issue is that the budget’s revenue forecasts assume the economy will grow by 2 per cent in 2015. Instead, the economy has seen negative growth over the first five months. The Bank of Canada expects things to improve later in the year but has downgraded its growth forecast for 2015 to 1.1 per cent.
The budget document stated that as a rough guide, a one-year, one-percentage-point decrease in economic growth would shave $4.1-billion from Ottawa’s bottom line.
Given that the budget forecast a $1.4-billion surplus for 2015-16, the slower growth would turn that surplus into a deficit. The Parliamentary Budget Officer released a report in July that projected the new economic landscape would lead to a $1-billion deficit for 2015-16 and a small surplus of $600-million in 2016-17.Report Typo/Error