Canada deficit shrinks more than anticipated

[CPCFTW]

The shortfall shrank to C$17.34 billion (US$17.32 billion) in April through November from C$26.02 billion in the year-ago period as revenues rose and program spending fell, the finance department said Friday

The government has forecast a C$31 billion deficit for the 2011/12 fiscal year, which ends March 31.

"Even amid heightened economic uncertainty and financial market volatility, the federal government's bottom line is slated to come in much better than last projected," Sonya Gulati, an economist at Toronto-Dominion Bank, wrote in a report. She estimates the gap could be around C$27-28 billion. She said the deficit as a share of gross domestic product will probably be close to 1.7%, significantly lower than the 3.6% figure at the peak of the recession.

The government aims to eliminate the deficit in the medium-term, and Finance Minister Jim Flaherty's upcoming 2012 Budget is expected to lay out plans for austerity measures to meet that goal. He has already announced plans to tie increases in federal healthcare transfers to provinces to the rate of growth of nominal gross domestic product - the broadest measure of the tax base - after 2016/17. Prime Minister Stephen Harper said in a speech Thursday that the government also wants to limit growth of the retirement income system.

Meanwhile, the finance department said program spending, which includes transfer payments and other expenses, fell 2.3% year-on-year to C$149.07 billion in the eight months through November, while revenue rose 3.9% to C$152.78 billion.

http://online.wsj.com/article/BT-CO-20120127-711601.html

For comparison, see this article from last year:

OTTAWA (AFP) – Canada’s deficit for the year ended March 31 will be much lower than originally forecast, at Can$34.4 billion, due to a drop in government spending and higher tax revenues, the finance department announced Friday.

The figure is down from Can$40.5 billion reported in March and from Can$47 billion the previous fiscal year.

Revenues were up Can$12.9 billion dollars or 5.9 percent while program expenses fell Can$1.0 billion or 0.4 percent, the department said.

Officials noted that half of the deficit — roughly Can$17 billion — was attributable to infrastructure funding and tax cuts that were parts of the government’s economic stimulus, which wraps up this year.

http://invadecanada.us/news/2011/05/27/canadas-2010-2011-budget-deficit-narrows/

Coles notes:

2010-2011E deficit: $40.5B

2010-2011A deficit: $34.4B

2011-2012E deficit: $31.0B

2011-2012A deficit: $17.3B (after 8 months...analysts now forecast $27B)

The deficit will be long gone by the time Harper is up for re-election. In fact, with the talk out of Ottawa being that cuts will be at least 5%, we may even see the deficit gone this FY!!

All hail king Harper!!!!

Edited January 28, 2012 by CPCFTW

[dre]

http://www.mapleleafweb.com/forums//index.php?app=forums&module=post&section=post&do=new_post&f=3

For comparison, see this article from last year:

http://invadecanada.us/news/2011/05/27/canadas-2010-2011-budget-deficit-narrows/

Coles notes:

2010-2011E deficit: $40.5B

2010-2011A deficit: $34.4B

2011-2012E deficit: $31.0B

2011-2012A deficit: $17.3B (after 8 months...analysts now forecast $27B)

The deficit will be long gone by the time Harper is up for re-election. In fact, with the talk out of Ottawa being that cuts will be at least 5%, we may even see the deficit gone this FY!!

All hail king Harper!!!!

Thats good! Theres no excuse for a Canadian government to run a deficit...

[Evening Star]

There are many situations in which deficit spending is justifiable. Still, this is good.

[cybercoma]

Yeah, right. They can say whatever they want. We've already seen how far off their accounting has been.

[msj]

Yeah, right. They can say whatever they want. We've already seen how far off their accounting has been.

Well, perhaps you can enlighten us on how far off it has been?

[Smallc]

Yeah...other than 2008 - 2009, I'm pretty sure they're been pretty much spot on, or have preformed better than they predicted.

[waldo]

All hail king Harper!!!!

you're welcome!

[cybercoma]

Yeah...other than 2008 - 2009, I'm pretty sure they're been pretty much spot on, or have preformed better than they predicted.

http://www.mapleleafweb.com/forums//index.php?showtopic=19993

Since there's absolutely no consequences for lying about it to the public, why not?

Edited January 28, 2012 by cybercoma

[CPCFTW]

http://www.mapleleafweb.com/forums//index.php?showtopic=19993

Since there's absolutely no consequences for lying about it to the public, why not?

Was this the same thread that referenced the fact that the finance minister has been closer to the correct numbers than the PBO?

You just can't give any credit where it's due. It all must be lies and a conspiracy against you!

[waldo]

You just can't give any credit where it's due.

you're welcome!

[CPCFTW]

you're welcome!

What does a chart showing the recent propensity of Canadians to elect conservative governments during economic downturns have to do with this thread?

Furthermore, the deficit was not -10% of GDP in 2009-2010. Where do you find these charts?

http://www.cbc.ca/news/canada/story/2010/10/12/flaherty-fiscal-update.html

Deficit = $55.6B

http://www.ic.gc.ca/eic/site/cis-sic.nsf/eng/h_00013.html

GDP = $925B

Does -55/925 = -10% in hippyland?

Furthermore, my own reference in the OP states the following:

She said the deficit as a share of gross domestic product will probably be close to 1.7%, significantly lower than the 3.6% figure at the peak of the recession.

I don't know what to trust, the government of Canada figures, the TD economist figures, or waldo's random chart posted on MLW!!

Edited January 28, 2012 by CPCFTW

[msj]

http://www.mapleleafweb.com/forums//index.php?showtopic=19993

Since there's absolutely no consequences for lying about it to the public, why not?

I don't think the PBO has anything to brag about, either.

But I suppose his forecasts aren't lies compared the the governments'?

------

Even Jim Stanford has said this:

One of the economists critical of the Martin approach, Jim Stanford of the Canadian Auto Workers, sees this tactic playing out again with the Conservatives.

“The billions in spending cuts that Mr. Flaherty is considering are, in my view, wrong and I think he too has painted the fiscal outlook darker than it is to try to justify those planned cuts,” he said.

Yet Mr. Stanford acknowledges his theory doesn’t explain why the PBO – an independent body – warns Ottawa won’t meet its deficit targets.

“I think the PBO folks are too bleak about the deficit numbers, too – especially their claim that we have a ‘structural” deficit,’ which I do not accept,” Mr. Stanford said.

IOW, even Jim Stanford thinks the link in your cross post is nonsense.

Edited January 28, 2012 by msj

[waldo]

What does a chart showing the recent propensity of Canadians to elect conservative governments during economic downturns have to do with this thread?

so... it's all about the "economic downturn", hey? I'm disappointed - I thought for sure you would have trotted out the usual go-to. You know, the Harper Conservative talking point that has Conservative spending forced upon them by a minority government! You need to study the manual more...

[cybercoma]

I don't think the PBO has anything to brag about, either.

But I suppose his forecasts aren't lies compared the the governments'?

------

Even Jim Stanford has said this:

IOW, even Jim Stanford thinks the link in your cross post is nonsense.

Yet, I didn't say that the PBO was right. I said the Conservatives have been wrong in their estimates. I couldn't possibly care less if the PBO was further away from the actual deficit 15/15 times.

[msj]

Yet, I didn't say that the PBO was right. I said the Conservatives have been wrong in their estimates. I couldn't possibly care less if the PBO was further away from the actual deficit 15/15 times.

Oh, so you don't know what "estimate" means.

Sorry, had I known that was what we were discussing I would have not bothered a couple of replies ago.

[CPCFTW]

so... it's all about the "economic downturn", hey? I'm disappointed - I thought for sure you would have trotted out the usual go-to. You know, the Harper Conservative talking point that has Conservative spending forced upon them by a minority government! You need to study the manual more...

Hard to argue with a chart of lies.

Are you disputing that GDP dropped from 1250B to close to 900B during the recent recession (during which Canadians gave Harper increasingly more votes)?

Here's a math exercise for you:

You have fixed expenditures of $200B, and tax receipts are approximately equal to 0.2x GDP.

Your GDP is $1250. Now what is your tax revenue and budget deficit?

Your GDP is $925. Now what is your tax revenue and budget deficit?

Edited January 28, 2012 by CPCFTW

[cybercoma]

Oh, so you don't know what "estimate" means.

Sorry, had I known that was what we were discussing I would have not bothered a couple of replies ago.

Has Flaherty's estimates not been further off than finance ministers in the past?

[msj]

Has Flaherty's estimates not been further off than finance ministers in the past?

You tell me if you want this to be a rhetorical question or not.

[waldo]

you're welcome!

Furthermore, the deficit was not -10% of GDP in 2009-2010. Where do you find these charts?

http://www.cbc.ca/news/canada/story/2010/10/12/flaherty-fiscal-update.html

Deficit = $55.6B

http://www.ic.gc.ca/eic/site/cis-sic.nsf/eng/h_00013.html

GDP = $925B

Does -55/925 = -10% in hippyland?

I don't know what to trust, the government of Canada figures, the TD economist figures, or waldo's random chart posted on MLW!!

another chucklefest, hey? Looks like a pattern this morning! In another concurrently running thread, you've just acknowledged you spouted off, ad nauseam, without actually reading that threads OP linked article. In this case, you clearly have shown you can't read graphic representations. Have another look at the graph... take some time, this time... ponder the two scales, left vs. right... note the two respective scale legends, clearly labeled in the graph as "left scale" & "right scale"... note the right scale legend label association to the horizontal drifting line... note where that line settles in against the right scale (the % of GDP scale).

although the graph emphasis was essentially a visual comparative one, government-to-government, having you once again stumble all over yourself in a fit of chuckling LOL, was gold, real gold!

[Topaz]

IF they can do it than good for them but income tax revenues is going to be lower because of retirments and unemployed. There also expenses like the military equipment which will be billions and plus regular expenses and how much have we spent on MP's pensions alone in the last 6 years and what is the expenses on that in the future? The talk about the OAS being in the billions, what theirs? There too much uncertainy to really know and besides, the Tories love to spend and we have to pay.

[mentalfloss]

you're welcome!

And that pretty much does it.

[CPCFTW]

another chucklefest, hey? Looks like a pattern this morning! In another concurrently running thread, you've just acknowledged you spouted off, ad nauseam, without actually reading that threads OP linked article. In this case, you clearly have shown you can't read graphic representations. Have another look at the graph... take some time, this time... ponder the two scales, left vs. right... note the two respective scale legends, clearly labeled in the graph as "left scale" & "right scale"... note the right scale legend label association to the horizontal drifting line... note where that line settles in against the right scale (the % of GDP scale).

although the graph emphasis was essentially a visual comparative one, government-to-government, having you once again stumble all over yourself in a fit of chuckling LOL, was gold, real gold!

My bad. FWIW I think that the bars should be eliminated completely as the deficit in dollar terms is irrelevant.

The chart still doesn't show anything but that gdp dropped during a recession when Harper came to power. Surely you can't blame Harper for that.

Have a go at my math exercise that I posted above.

Are you disputing that GDP dropped from 1250B to close to 900B during the recent recession (during which Canadians gave Harper increasingly more votes)?

Here's a math exercise for you:

You have fixed expenditures of $200B, and tax receipts are approximately equal to 0.2x GDP.

Your GDP is $1250. Now what is your tax revenue and budget deficit?

Your GDP is $925. Now what is your tax revenue and budget deficit?

Edited January 28, 2012 by CPCFTW

[Shady]

you're welcome!

I've always praised the job Chretien and Martin did as PM and Finance Minister. They cut spending by about 15% across the board, and reformed programs like EI when we were approaching dangerous debt to GDP levels. Their actions were necessary and help put us on a very healthy fiscal path. Probably the healthiest of any of the G8 countries.

[cybercoma]

I've always praised the job Chretien and Martin did as PM and Finance Minister. They cut spending by about 15% across the board, and reformed programs like EI when we were approaching dangerous debt to GDP levels. Their actions were necessary and help put us on a very healthy fiscal path. Probably the healthiest of any of the G8 countries.

It must really piss you off that Harper has squandered that on ideological pet projects.

[CPCFTW]

It must really piss you off that Harper has squandered that on ideological pet projects.

Actually it was "squandered" by the global recession. I think you need to try my math exercise too!

Edited January 28, 2012 by CPCFTW