Opposition parties are accusing the Conservatives of hiding the truth about Canada’s finances in advance of an election, as expert projections contradict Finance Minister Joe Oliver’s declaration that the books will be balanced in the current fiscal year.
The New Democrats and the Liberals sought to embarrass the Tories by forcing a special closed-door meeting of the Commons finance committee on Monday, when they asked that Mr. Oliver be called to explain why his forecasts do not align with those of the Parliamentary Budget Officer (PBO) and the Bank of Canada. They were quickly overruled by the majority Conservatives.
The commitment to a federal surplus in 2015, after seven straight years of deficit, was at the core of the budget that Mr. Oliver released in April, and failure to meet that pledge could feed unease about the Conservative economic record as the country heads to the ballot box.
It could also make it more difficult for Prime Minister Stephen Harper to pay for campaign promises and voter enticements, including the $3-billion in cheques that arrived in the mailboxes of Canadian parents last week as a result of changes to his government’s universal child-care benefit.
“The gifts that the Conservatives are throwing around on the eve of an election right now – the cheques that they are handing out – if deficit-financed, will actually be paid for in the future by cuts to services or higher taxes,” Scott Brison, the Liberal finance critic, told reporters after the meeting ended. “Which is not responsible fiscally and is dishonest to Canadians.”
In the April budget, the government said there would be a surplus of $1.4-billion in this fiscal year and $1.7-billion in 2016-17.
But Canada’s economy has been faltering and the PBO said last week that lower GDP numbers suggest there will be a $1-billion deficit in 2015-16 and that the surplus next year will be closer to $600-million.
Those projections were based on the latest economic forecast by the Bank of Canada, which has reduced the outlook for economic growth in 2015 from 1.9 per cent to 1.1 per cent.
An update on federal finances released by Finance Canada just an hour before the PBO report was made public said the federal government posted a $3.9-billion surplus in April and May, the first two months of the 2015-16 fiscal year. But that included a one-time gain of $2.1-billion from the sale of General Motors shares and did not count the billions in child-care payouts that have since been deducted from the bottom line.
Mr. Brison said the opposition MPs are merely asking Mr. Oliver to release the updated fiscal information that is in the hands of his department.
“The reality is we are the only G7 country to be in recession right now,” Mr. Brison said. “Regardless of electoral cycles, ministers of finance have a responsibility during times of uncertainty of providing information to Canadians.”
Guy Caron, the deputy finance critic for the NDP, said it would be interesting to hear Mr. Oliver explain his claim that there will be a balanced budget when the PBO disagrees.
“We are going into an election this fall,” Mr. Caron said. “I think Canadians are entitled to know where we stand in terms of our economic situation, and right now it’s clear that Conservatives aren’t interested in bringing a light to this.”
But James Rajotte, the Conservative MP who chairs the finance committee, said Canadians will have a better handle on the country’s financial situation on election day than they do now because there will be fewer months of projections left in the fiscal year.
“The PBO’s report is about projections,” Mr. Rajotte said. “Obviously our projections change depending on the economic circumstances. So, to predict the next 10 months? It’s a lot like predicting the weather. It’s a very challenging thing to do.”Report Typo/Error