Good News: Deficit to be $30 Billion says Bloomberg

[Argus]

They all (every one I've seen) talk about how the deficits are necessary for the short to medium term. The Bank of Canada has echoed that. Conservatives apparently don't read.

The federal government is not spending the excess money on economic incentives, nor is it spending it on infrastructure.

[Smallc]

The federal government is not spending the excess money on economic incentives, nor is it spending it on infrastructure.

$5B in new spending on infrastructure, and $5B on a new child benefit plan. There's also money for poor seniors. There's no stimulus, but only promises kept. The larger deficit is mostly a function of a worse baseline.

[SunnyWays]

$5B in new spending on infrastructure, and $5B on a new child benefit plan. There's also money for poor seniors. There's no stimulus, but only promises kept. The larger deficit is mostly a function of a worse baseline.

And as of this month, that baseline is rapidly changing....oil up over $40, Manufacturing starting to gain traction with the low dollar, stock markets responding. All without a "stimulus". With no sign of even aspiring to balance the budget as they promised, it's reasonable to fear that they'll blow through the $30 billion in spite of increasing revenues.

[Smallc]

And as of this month, that baseline is rapidly changing....oil up over $40, Manufacturing starting to gain traction with the low dollar, stock markets responding. All without a "stimulus". With no sign of even aspiring to balance the budget as they promised, it's reasonable to fear that they'll blow through the $30 billion in spite of increasing revenues.

It's reasonable to expect that the deficit will end up far lower.

[SunnyWays]

It's reasonable to expect that the deficit will end up far lower.

Yes it is.....how would you feel if revenues substantially increased (say by $5 or $10 billion) and they STILL created a real deficit of $30 billion. That's what I'm worried about. Would it not be appropriate to state exactly that in their budget - that any revenues in excess of their estimates will reduce their "planned" deficit? I'd feel a lot better about this government if they did that - especially based on an election promise of a $10 billion deficit - and a promised balanced budget by end of term. Make sense?

[Smallc]

I'm not worried about it. If revenues are higher the deficit will be lower. It's that simple.

[Bob Macadoo]

Would it not be appropriate to state exactly that in their budget - that any revenues in excess of their estimates will reduce their "planned" deficit?

There is no political advantage to do that. If it occurs one will say 'Nothing to do with them, that's all Alta.' If it doesn't occur one will say 'Commitment NOT met.'

I'd feel a lot better about this government if they did that - especially based on an election promise of a $10 billion deficit - and a promised balanced budget by end of term. Make sense?

I doubt that. You don't create a mocking handle of the PM wanting him to achieve political success.

[SunnyWays]

I doubt that. You don't create a mocking handle of the PM wanting him to achieve political success.

Mocking is a bit harsh. Tongue-in-cheek is more what I had in mind. That said, I think it's reasonable to have SOME scepticism over this government's plan for the deficit and balanced budgets. As for not wanting this Prime Minister to achieve political success, that would be pretty dumb. I want Canada to succeed - to thrive - and if Justin Trudeau and the Liberal government are the custodians of that success, I'll be happy to give them credit. Give credit where credit is due - but when the measuring stick for Liberal competence is the Wynne government here in Ontario, forgive me for not jumping on the bandwagon just yet.

[Argus]

It's reasonable to expect that the deficit will end up far lower.

I predicted before the election that Trudeau will never balance a budget, however long he's in office. He's not psychologically capable of even being concerned about what things cost. He grew up with a silver spoon in his mouth, never having any idea what things cost, never having to bother about such things.

[Argus]

I'm not worried about it. If revenues are higher the deficit will be lower. It's that simple.

Revenues are way higher in Ontario than when the Liberals took over, but that's okay, spending increased every year to more than match it. The same will happen federally. Neither Liberal government will ever balance a budget.

[Smallc]

Revenues are way higher in Ontario than when the Liberals took over, but that's okay, spending increased every year to more than match it. The same will happen federally. Neither Liberal government will ever balance a budget.

Ontario's deficit is on its way to balance, but don't let facts stop you. The rest is just partisan musings.

[Argus]

Ontario's deficit is on its way to balance, but don't let facts stop you. The rest is just partisan musings.

Ontario's deficit is nowhere near being balanced, unless you believe the twisted way the Liberals have handled the accounting. They say they will have a balanced budget next year -- just don't look behind the curtain, because they plan to borrow another $7.5 billion next year - off books. They also plan to borrow $10 billion the following year -- off the official books.

[Smallc]

Actually, Ontario, with the rule changes, is coming closer to working with GAAP, separating capital from operations.

[Argus]

Actually, Ontario, with the rule changes, is coming closer to working with GAAP, separating capital from operations.

You can write off capital expenditures on your taxes when you're a private corporation. You don't get to do that as the government.

If you're borrowing ten billion a year you're damned sure not balancing the bloody budget.

[Smallc]

You can write off capital expenditures on your taxes when you're a private corporation. You don't get to do that as the government.

If you're borrowing ten billion a year you're damned sure not balancing the bloody budget.

That depends. If you have an infrastructure deficit, and you're shrinking that, you're really moving money from one column to another. There is a cost in either case in terms of upkeep, inflation, interest (depending on the column). BC has done the same thing for years, and Manitoba ha part way there.

[Argus]

That depends. If you have an infrastructure deficit, and you're shrinking that, you're really moving money from one column to another. There is a cost in either case in terms of upkeep, inflation, interest (depending on the column). BC has done the same thing for years, and Manitoba ha part way there.

Anyone who says his government has balanced the budget even while it's borrowing billions every year is lying through his or her teeth. I don't care how many accounting games they're playing.

[Smallc]

Anyone who says his government has balanced the budget even while it's borrowing billions every year is lying through his or her teeth. I don't care how many accounting games they're playing.

An infrastructure deficit is just as real as a monetary deficit. It's not a game.

[Argus]

An infrastructure deficit is just as real as a monetary deficit. It's not a game.

If you need to spend more on infrastructure then you spend less on other things. For example, Trudeau promised $700 million more a year for the arts.

It's called prioritizing. You don't just say "Uhm, I'll take everything. Here's my credit card".

[Smallc]

It's called prioritizing. You don't just say "Uhm, I'll take everything. Here's my credit card".

You can also raise taxes - like you said, it's about priorities, and your's aren't always shared by the population at large.

[Argus]

You can also raise taxes - like you said, it's about priorities, and your's aren't always shared by the population at large.

I bet they're shared by most taxpayers. The freeloaders would have a different view, of course.

[Smallc]

I bet they're shared by most taxpayers. The freeloaders would have a different view, of course.

I'm far from a freeloader. I'm not sure you speak for the majority, either. Canadians, for example, say they'd rather spend more on energy to fight climate change. I'm sure you disagree with that.

[Argus]

I'm far from a freeloader. I'm not sure you speak for the majority, either. Canadians, for example, say they'd rather spend more on energy to fight climate change. I'm sure you disagree with that.

Yeah? How much more? Cite please.

[Argus]

Andrew Coyne points out how disjointed and confused Liberal fiscal policy is, and that it's not really about economic incentives or needs, but mostly it's just about spending lots and lots of money because, well, they can, and it's popular.

Lacking any visible benchmark of the “fiscal responsibility” to which the prime minister claims to be devoted — the $10-billion cap long since discarded, along with the pledge to balance the books by 2020, with the promise to reduce the debt-to-GDP ratio soon to follow — we seem headed for an extraordinary burst of spending, in answer to the demands of every conceivable interest.

http://news.nationalpost.com/news/canada/andrew-coyne-when-if-at-all-this-government-intends-to-bring-the-party-to-an-end-is-at-this-point-very-much-a-mystery

[69cat]

Lucky thing inflation rate dropped to 1.4% in Feb, down from 1.9% in Jan and stopping the rising trend. Bank of Canada targets 2% rate so things like high gas or lower $Can dollar would push inflation higher and BofC would be looking to boost interest rates to cool the economy to lower inflation while the government is running deficits to boost the economy. Looks like in todays world inflation rate is no longer an indicator of need for government stimulus.

[Smallc]

The government isn't planning any stimulus. We still have an infratru the deficit.