No matter what Finance Minister Jim Flaherty told you on Tuesday, Canada’s 2014-15 federal budget will be balanced.
Flaherty is more likely to project a small deficit for the coming year when he stands up in the House of Commons. Then in November, and again when budget season rolls around in the spring of 2015, he will slowly come clean with taxpayers about the size of the modest surplus that’s likely in the cards.
Why should we be so confident that the budget will actually be balanced in 2014-15? For starters, the Prime Minister personally guaranteed it during the last election campaign on April 8th, 2011. Stephen Harper is known to be stubborn about honouring his personal guarantees.
Then there’s the federal finances themselves: last year’s deficit was $7 billion lower than originally projected. This year’s shortfall, eight months into the year, sits at $13.8 billion, including $3.7 billion set aside to cover the costs of the disastrous flood in Alberta.
Federal revenues are expected to rise more than $12 billion in 2014-15, with overall spending down slightly from last year. Remove Mr. Flaherty’s $3 billion ‘adjustment for risk’ from the equation, and you have revenue of $280.4 billion and spending of $282.8 billion: more than 99 cents of taxpayer money to cover every dollar projected to go out the door- In other words, within a rounding error (or a small adjustment) of a balanced budget.
Yet, all this political gamesmanship is designed to reveal a balanced budget right before the election date.
By then, the Harper government will have introduced the 2015 budget, likely with enough surplus cash on hand to make a sizeable payment on the national debt – possibly more than $10 billion. But don’t count on that happening.
In an election year, budgets are delivered with all eyes on the ballot box. Politicians expect every surplus dollar in the budget to be directly exchangeable for votes.
The challenge, between budget 2014 and budget 2015, is get federal politicians of all stripes to put hard-pressed, long-suffering taxpaying Canadian households first.
We need to put politicians on notice that a balanced budget is not an excuse for crony capitalism, corporate welfare or social engineering. It’s not an excuse for a spending spree on shiny big-ticket projects to win the gratitude of the political machines behind the big-city mayors.
In the next election, the test for every political party needs to have two questions. First, will you balance the budget and reduce the debt in each year of your term? Second, how much more of our own money will we see on every paycheque if we elect you?