Finance Minister Jim Flaherty acts like accurate economic projections aren’t important as his government’s rosy projections and absence of rainy-day contingency keeps driving Canada’s public finances through the basement floor.
Yesterday in Question Period, Minister Flaherty had the temerity to say, with a straight face, that the Parliamentary Budget Officer “was wrong before and he’s wrong again,” this time for pointing out a $10 billion gap in Budget 2010’s five-year deficit forecast.
The record shows who’s really wrong:
In September 2008, Stephen Harper told the Winnipeg Sun that, “the country has not dipped into a deficit. We continue to be in surplus, we will run a surplus budget this year.” Yet even though Minister Flaherty projected an $800 million surplus for 2008-09 in the November 27, 2008 Fiscal Update, the country was already in deficit, en route to an actual $5.8 billion deficit.
Minister Flaherty continued to maintain that there would be a surplus in 2009-10 as well, telling Reuters, “it’s a question of making sure that we maintain a surplus. I’m comfortable with a relatively modest surplus….I think we can maintain that. We’re disciplined enough to do that and that’s how we plan.” In keeping with this projection, his November 27, 2008 Fiscal Update also projected a $100 million surplus for 2009-10.
Only a week earlier, on November 20, 2008, the PBO painted a bleaker picture, writing, “Looking forward, assuming status quo fiscal policy, the downgraded economic outlook translates into a deterioration in the budgetary balance, putting the Government’s stated fiscal targets and objectives at risk. In the PBO survey average scenario, modest deficits are projected in the near term.” The actual results bear the PBO’s forecast out. On January 21, 2009, before Budget 2009 was introduced, the PBO revised their 2009-10 forecast to project a $13 billion deficit. Four months after projecting a $100 million surplus, the actual deficit before the Economic Action Plan was $15.7 billion – well within the PBO’s ball park.
Minister Flaherty, who told the Edmonton Journal flat out that “we will not run a deficit,” on October 9, 2008, projected a $33.7 billion deficit for 2009-10 in Budget 2009. The deficit for 2009, after the Economic Action Plan, was $54 billion – a full $20 billion off the mark.
