Canada will slump into deficit next year: Flaherty

[jdobbin]

ha, like he had much choise with all the opposition hand wringing over a 'stimulus package'

This deficit has nothing to do with the stimulus package as there hasn't been one penny spent. This is all Tory mismanagement from 2006 to 2008.

[jdobbin]

It's on the Globe and Mail as well...if you need me to find it and link it. That was the number they were looking at...

And a day or so later, this number was completely denied as no one had even talked about a figure since they had not seen the finance books yet.

John McCallum had to correct a few Liberals who heard that number by saying nothing was agreed to in the meeting. He also had to correct the impression that an economic panel was assembled.

Dion's poor communications was to blame for most of this but the fact remains that within a day, McCallum was reporting that no number was agreed on.

Edited December 18, 2008 by jdobbin

[Canadian Blue]

Do you like paying higher taxes to pay for Tory deficits? Mulroney increased taxes 19 times but could never get a handle on spending. And rather than get a handle on it, he tried constitutional talks twice and failed.

Yes, as we all know NAFTA and the GST did absolutely nothing to help alleviate the deficit. If only Brian Mulroney had maintained the fiscal discipline shown by the wunderkind Pierre Trudeau.

The Liberals decreases spending, eliminated the deficit and were paying down debt and left money in the bank to avoid a downturn as we are seeing now. They also decreased taxes.

Likely because they couldn't keep any of their promises on cutting the GST, and maintained most of the Tory initiatives at the time such as NAFTA. I'll give credit to Chretien and Martin for cutting the deficit, but don't act like the upsurge in the global economy at the time had no effect on getting rid of the deficit.

Edited December 18, 2008 by Canadian Blue

[jdobbin]

A liquidity crisis, and the consequence of lower tax revenue for consumer purchases and business revenue, happened to the $15B surplus.

The budget officer said it was Tory spending and tax cuts that put on into deficit territory.

Complaining about where the surplus went during an economic crisis is particularly funny when everyone's demanding increased government spending and corporate bailouts.

People were complaining about government overspending before the crisis too.

[jdobbin]

Yes, as we all know NAFTA and the GST did absolutely nothing to help alleviate the situation for the deficit. If only Brian Mulroney had maintained the fiscal discipline shown by the wunderkind Pierre Trudeau.

Mulroney did not decrease spending. It was still way above the increase in population and the rate of inflation. Harper increased revenues. That is it.

Likely because they couldn't keep any of their promises on cutting the GST, and maintained most of the Tory initiatives at the time such as NAFTA. I'll give credit to Chretien and Martin for cutting the deficit, but don't act like the upsurge in the global economy at the time had no effect on getting rid of the deficit.

Other countries went back into deficit long before Canada. Fiscal discipline was the hallmark of most of the Liberals years in government.

Harper has been spending like a drunken sailor and cutting taxes: a lethal combination.

[fellowtraveller]

We need Bob Rae as Finance Minsiter for a dose of cutting edge fiscal policy.

Or Jack Layton calling the shots.

Can you imagine?

[Canadian Blue]

The budget officer said it was Tory spending and tax cuts that put on into deficit territory.

Odd isn't it that the British Labour government had put in similar tax cuts as the Tories to help provide a stimulus for the economy, no?

Mulroney did not decrease spending. It was still way above the increase in population and the rate of inflation. Harper increased revenues. That is it.

Weird, I could have sworn that the Liberal controlled Senate at the time was doing everything to stop cuts in spending. This of course included attempts to halt progress on free trade.

Other countries went back into deficit long before Canada. Fiscal discipline was the hallmark of most of the Liberals years in government.

Fiscal discipline, eh. You mean essentially continuing most of the Tories policies such as NAFTA and the GST. As well the fact our country was one of the last to go into deficit with the Tories at the helm is hardly something to balk at.

By the way it's also good to note that the Liberal bretheren in Ontario have consistently been opposed to giving an economic stimulus in the form of a corporate taxcut, something which both federal and provincial Liberals are vehemently opposed to. Perhaps you should reconsider your argument that Liberals are always known for fiscal discipline as they don't seem to have a lick of common sense when it comes to taxation.

Edited December 18, 2008 by Canadian Blue

[jdobbin]

We need Bob Rae as Finance Minsiter for a dose of cutting edge fiscal policy.

Or Jack Layton calling the shots.

Can you imagine?

Instead we have Flaherty, a sound financial master about to let the Canadian economy go into deficit.

[Canadian Blue]

Instead we have Flaherty, a sound financial master about to let the Canadian economy go into deficit.

jdobbin, are you now opposed to any stimulus plan which both the Liberals and New Democrats are touting, and one which will more than likely get the support of both the Tories and the Liberals at the end of January?

Or will you oppose any stimulus plan because you don't want the country to go into deficit?

[jdobbin]

Odd isn't it that the British Labour government had put in similar tax cuts as the Tories to help provide a stimulus for the economy, no?

The present deficit has nothing to do with the stimulus package on the table now.

Weird, I could have sworn that the Liberal controlled Senate at the time was doing everything to stop cuts in spending. This of course included attempts to halt progress on free trade.

Which is why Harper stacked the Senate. But did he cut spending? No. He opened the Constitution. Twice.

Fiscal discipline, eh. You mean essentially continuing most of the Tories policies such as NAFTA and the GST. As well the fact our country was one of the last to go into deficit with the Tories at the helm is hardly something to balk at.

Liberals did continue Tory policies. Too bad Tories didn't continue Liberal policies of keeping a lid on spending.

Harper blew through the surplus with spending that broke his promises *every* time.

By the way it's also good to note that the Liberal bretheren in Ontario have consistently been opposed to giving an economic stimulus in the form of a corporate taxcut, something which both federal and provincial Liberals are vehemently opposed to. Perhaps you should reconsider your argument that Liberals are always known for fiscal discipline as they don't seem to have a lick of common sense when it comes to taxation.

Seems to me that it was the Liberals who had the sense to cut income taxes while Harper cut the GST.

[jdobbin]

jdobbin, are you now opposed to any stimulus plan which both the Liberals and New Democrats are touting, and one which will more than likely get the support of both the Tories and the Liberals at the end of January?

I am opposed to any fiscal stimulus that doesn't attempt to put a lid on other spending.

Or will you oppose any stimulus plan because you don't want the country to go into deficit?

I will shout at any party who puts Canada into deficit.

[Canadian Blue]

The present deficit has nothing to do with the stimulus package on the table now.

So a stimulus package will not incur a deficit, or for that matter the GST cut which is now being implemented in the UK as well, will do nothing to help the economy.

Which is why Harper stacked the Senate. But did he cut spending? No. He opened the Constitution. Twice.

Are you talking about Mulroney or Harper. As was stated before the Liberal dominated Senate was attempting to halt many of Mulroney's initiatives including the GST and NAFTA. Both of those planks likely helped Canada's fiscal situation.

In the end I think even you could agree that Mulroney was a better pick in 1988 than John Turner who wanted to put us back into the same mindset as the 1970's.

Liberals did continue Tory policies. Too bad Tories didn't continue Liberal policies of keeping a lid on spending.

Oh I agree with you that the Tories should have kept a lid on spending, and I applauded the cuts they made when they first got into office. However the Liberal Party wasn't going to keep a lid on spending, the only difference was that while the Tories increased spending on border security, the military, law enforcement, and GST cuts, the Liberals wanted to instead direct more spending towards Young People Fucking, taking over the nurseries of the nation, and implementing a large carbon tax.

Seems to me that it was the Liberals who had the sense to cut income taxes while Harper cut the GST.

You mean increasing taxes by $15 billion and giving us a couple of trinkets worth approximately $10 billion and spending the rest on building state owned nurseries and funding Tal Bachmann's trip to Africa?

Edited December 18, 2008 by Canadian Blue

[Canadian Blue]

I am opposed to any fiscal stimulus that doesn't attempt to put a lid on other spending.

I will shout at any party who puts Canada into deficit.

So are you now saying that you'll oppose the Liberals who are touting deficit spending at this time to help bring about an economic stimulus package?

[Moonbox]

Do you like paying higher taxes to pay for Tory deficits? Mulroney increased taxes 19 times but could never get a handle on spending. And rather than get a handle on it, he tried constitutional talks twice and failed.

Jdobbin I know you understand the difference between running giant deficits during GOOD economic times vs giant deficits in bad times. Mulroney had a crap economy to deal with for the largest part of his term. Inflation was extremely high and thus so were interest rates and something ludicrous like +40% of every tax dollar was going towards debt payments, which was covering pretty much interest only. This was all a mess he inherited from Trudeau.

The deficit was higher during Trudeau's term (relative to the size of Canada's economy) than it EVER was under Mulroney. He wasn't a good PM, I'll concede that, but Trudeau was far far worse. The worst part about it, however, was that Trudeau did this ALL with basically zero previous debt and a largely rosy economy.

The Liberals decreases spending, eliminated the deficit and were paying down debt and left money in the bank to avoid a downturn as we are seeing now. They also decreased taxes.

The Liberals did this over 12 years during the strongest economic time we've seen in 50 years. This means higher tax revenues with less need for social spending (see EI surpluses).

They over-taxed federally and cut transfer payments to provinces, many of whom had to raise taxes or make enormous cuts to cover the deficiency.

Granted, they did cut spending, and they finally turned away from Trudeau economics, but you VASTLY exaggerate their competence fiscally.

To put it simply, they were in the right place at the right time.

This whole balogna argument about Harper eliminating the surplus and giving us no breathing room is a joke. The 2004-2005 surplus was 1.6 billion. That's how much breathing room Paul Martin had during a booming economy. Get out of here.

Edited December 18, 2008 by Moonbox

[jdobbin]

So a stimulus package will not incur a deficit, or for that matter the GST cut which is now being implemented in the UK as well, will do nothing to help the economy.

I am saying that Harper will go into deficit four years in a row according to this own words before they spend one penny on stimulus.

Are you talking about Mulroney or Harper. As was stated before the Liberal dominated Senate was attempting to halt many of Mulroney's initiatives including the GST and NAFTA. Both of those planks likely helped Canada's fiscal situation.

And Mulroney stacked the Senate with eight more Tory Senators and rammed through the GST *but* didn't make any spending cuts of significance.

Harper increased revenue. He was a tax and spend Tory.

In the end I think even you could agree that Mulroney was a better pick in 1988 than John Turner who wanted to put us back into the same mindset as the 1970's.

I think Turner would have been better on spending.

Oh I agree with you that the Tories should have kept a lid on spending, and I applauded the cuts they made when they first got into office. However the Liberal Party wasn't going to keep a lid on spending, the only difference was that while the Tories increased spending on border security, the military, law enforcement, and GST cuts, the Liberals wanted to instead direct more spending towards Young People Fucking, taking over the nurseries of the nation, and implementing a large carbon tax.

Tory overspending didn't include military and aboriginal affairs. He overspent his promise on all other spending. Many Tories keep pointing out the military but the promise not to spend over the rate of population increase and rate of inflation was for all other spending.

The Liberals lost the election in part because of Harper's promise on spending controls. They punished the Liberals in part because of trying to buy an election with spending.

Harper had a mandate for keeping a lid on spending.

You mean increasing taxes by $15 billion and giving us a couple of trinkets worth approximately $10 billion and spending the rest of building state owned nurseries and funding Tal Bachmann's trip to Africa?

Liberals decreased taxes under Martin.

Harper funded a UFO museum.

[jdobbin]

So are you now saying that you'll oppose the Liberals who are touting deficit spending at this time to help bring about an economic stimulus package?

Yes.

[Canadian Blue]

I am saying that Harper will go into deficit four years in a row according to this own words before they spend one penny on stimulus.

Probably because that's what most economists have forecasted, and most will still note that Canada is still in the best shape economically compared to most other western nations.

I think Turner would have been better on spending.

Only because the Liberal Senate would have actually supported spending cuts. However I'm gratified to see that you would have opposed free trade in 1988.

Liberals decreased taxes under Martin.

Yes, in 2000, right before the election, when the opposition was running on a platform of steep cuts in taxation.

Jdobbin if even the Liberals aren't good on spending as you seem to now admit, and should have known based on the platform given to Canadian's by Dion which included steep increases for crappy art. Then which party would actually support in an election, would be behind a new Reform Party?

[jdobbin]

Jdobbin I know you understand the difference between running giant deficits during GOOD economic times vs giant deficits in bad times. Mulroney had a crap economy to deal with for the largest part of his term. Inflation was extremely high and thus so were interest rates and something ludicrous like +40% of every tax dollar was going towards debt payments, which was covering pretty much interest only. This was all a mess he inherited from Trudeau.

Mulroney had a booming economy by the end and didn't cut spending. His priority was making himself a legend by getting Quebec into the constitution. Our economy could have done even better if he had let the issue rest. He just couldn't do that though.

He raised taxes 19 times and didn't cut spending even when he had control of the Senate.

The deficit was higher during Trudeau's term (relative to the size of Canada's economy) than it EVER was under Mulroney. He wasn't a good PM, I'll concede that, but Trudeau was far far worse. The worst part about it, however, was that Trudeau did this ALL with basically zero previous debt and a largely rosy economy.

Because Mulroney had a growing economy due to a recovery in the U.S. and he increased revenues with multiples tax increases.

The Liberals did this over 12 years during the strongest economic time we've seen in 50 years. This means higher tax revenues with less need for social spending (see EI surpluses).

I haven't let Trudeau off the hook. You seem to have let Mulroney off the hook by making some inferring he was responsible for the end of the deficit. He wasn't. He was responsible for a massive increase in revenue. Even with that increase though, the deficit required spending cuts to be defeated.

They over-taxed federally and cut transfer payments to provinces, many of whom had to raise taxes or make enormous cuts to cover the deficiency.

Many provinces used the time to decrease taxes rather than fund programming.

Granted, they did cut spending, and they finally turned away from Trudeau economics, but you VASTLY exaggerate their competence fiscally.

You grossly dismiss it.

To put it simply, they were in the right place at the right time.

In part because Mulroney imploded his party with wrong decisions.

This whole balogna argument about Harper eliminating the surplus and giving us no breathing room is a joke. The 2004-2005 surplus was 1.6 billion. That's how much breathing room Paul Martin had during a booming economy. Get out of here.

How much?

http://www.statcan.gc.ca/daily-quotidien/0...050616a-eng.htm

The biggest surplus was recorded by the Canada Pension Plan at $8.0 billion. Close behind was the federal government with $7.8 billion, its eighth surplus in a row. The Quebec Pension Plan had a surplus of $1.6 billion.

Edited December 18, 2008 by jdobbin

[jdobbin]

Probably because that's what most economists have forecasted, and most will still note that Canada is still in the best shape economically compared to most other western nations.

That is what the government is saying:

http://ca.news.yahoo.com/s/capress/081218/.../budget_deficit

The federal government is expected to post at least four years of budget deficits even before Ottawa spends a dime on stimulating the economy, suggests papers released by the Finance Department.

Ottawa is officially projecting deficits of about $5 billion next year and $5.5 billion in the 2010-11 fiscal period.

I think we could have been in so good shape as to not go into deficit.

Only because the Liberal Senate would have actually supported spending cuts. However I'm gratified to see that you would have opposed free trade in 1988.

I supported free trade. I supported Martin because of Mulroney and his actions against Manitoba and spending.

Yes, in 2000, right before the election, when the opposition was running on a platform of steep cuts in taxation.

Take credit if you want. The cuts still happened under the Liberals.

Jdobbin if even the Liberals aren't good on spending as you seem to now admit, and should have known based on the platform given to Canadian's by Dion which included steep increases for crappy art. Then which party would actually support in an election, would be behind a new Reform Party?

Harper's increases to the arts have been greater than what the Liberals had proposed in previous elections. If you don't like crappy art or the CBC, speak to Harper.

Harper had two years where he was able to push around a weak Liberal party and leader and the best they could do was a spending spree that erased billions in surplus and left no room for a downturn.

[Canadian Blue]

Mulroney had a booming economy by the end and didn't cut spending. His priority was making himself a legend by getting Quebec into the constitution. Our economy could have done even better if he had let the issue rest. He just couldn't do that though.

He raised taxes 19 times and didn't cut spending even when he had control of the Senate.

Mulroney privatized 23 crown corporations, ended the National Energy Program, brought forward NAFTA which was vehemently opposed by the Liberals in 1988, and put in place the GST to replace the MST. I will fault him on his big spending ways, but to say that a continuation of Liberal Party policies during the 80's and early 90's would have been a better alternative is ridiculous.

As well to argue that the worldwide recession of the early 90's wouldn't affect the budget deficit is just as absurd, that's not an example of a booming economy. Kim Campbell proved to be correct in the election when she stated the budget deficit wouldn't be erased until the late 90's, and yet their were good things that came about due to the reign of Mulroney jdobbin.

[jdobbin]

I will fault him on his big spending ways, but to say that a continuation of Liberal Party policies during the 80's and early 90's would have been a better alternative is ridiculous.

I think it is ridiculous to think that Turner would have continued policies that you describe. He probably would have saved us billions in better budgets, better fiscal management and avoided constitutional crisis after crisis.

As well to argue that the worldwide recession of the early 90's wouldn't affect the budget deficit is just as absurd, that's not an example of a booming economy. Kim Campbell proved to be correct in the election when she stated the budget deficit wouldn't be erased until the late 90's, and yet their were good things that came about due to the reign of Mulroney jdobbin.

The boom during the Reagan years led to a boom in Canada as well. If Mulroney had controlled spending and avoided opening the Constitution, the deficit could have ended in the early 1990s.

[Canadian Blue]

Harper's increases to the arts have been greater than what the Liberals had proposed in previous elections. If you don't like crappy art or the CBC, speak to Harper.

I'm talking about the recent election where the Liberals promised to do far more because "arts is fun." Whether you like it or not the big difference between the Liberals and Conservatives is that at the very least the CPC wasn't going to put in place a large bureaucracy like National Daycare, it was more or less the choice between the lesser of two evils, in the last election the lesser of two evils was Harper.

I think we could have been in so good shape as to not go into deficit.

Only if we had implemented your parties $40 billion dollar tax on the economy.

So if you are so against a deficit you must have not voted for the Liberal Party with Stephane Dion, Bob Rae, and Ujhal Dosanjh, each of whom has been associated with fiscal prudence.

[jdobbin]

I'm talking about the recent election where the Liberals promised to do far more because "arts is fun." Whether you like it or not the big difference between the Liberals and Conservatives is that at the very least the CPC wasn't going to put in place a large bureaucracy like National Daycare, it was more or less the choice between the lesser of two evils, in the last election the lesser of two evils was Harper.

Dion lost. Now it is time to grow up and acknowledge that Harper put the country into deficit, not Dion.

Only if we had implemented your parties $40 billion dollar tax on the economy.

And Harper is delivering a $20 billion deficit over four years before he does even one thing beyond that.

So if you are so against a deficit you must have not voted for the Liberal Party with Stephane Dion, Bob Rae, and Ujhal Dosanjh, each of whom has been associated with fiscal prudence.

I voted for a party with Michael Ignatieff, John McCallum and Gerard Kennedy who I had a lot more faith in to avoid a deficit.

[Canadian Blue]

I think it is ridiculous to think that Turner would have continued policies that you describe. He probably would have saved us billions in better budgets, better fiscal management and avoided constitutional crisis after crisis.

The boom during the Reagan years led to a boom in Canada as well. If Mulroney had controlled spending and avoided opening the Constitution, the deficit could have ended in the early 1990s.

The worldwide recession happened in the early 90's jdobbin, the same time that the Liberal Party was opposing NAFTA and changes to the GST. The fact that most spending cuts were opposed by the Liberal dominated Senate doesn't even seem to come up on the radar.

Have you ever wondered why people call you hyper-partisan. This is the reason why because you argue that if we had elected a protectionist government which wanted to create 'make work programs' in 1988 our country would have been far better off today.

Edited December 18, 2008 by Canadian Blue

[Canadian Blue]

Dion lost. Now it is time to grow up and acknowledge that Harper put the country into deficit, not Dion.

I fully acknowledge that Harper put the country into deficit, what I'm questioning is why you're stating that a party which was going to increase taxation by $40 billion and introduce largescale national social programs was going to keep us out of deficit and promote a strong economy.

I voted for a party with Michael Ignatieff, John McCallum and Gerard Kennedy who I had a lot more faith in to avoid a deficit.

Problem with the Liberals is that they've veered far to the left. Depending on what Ignatieff does, the LPC could instead become just an NDP lite, if they do the party of Paul Martin, John Manley, and Frank McKenna, is dead.

Edited December 18, 2008 by Canadian Blue