Federal budget surplus balloons to $14B

[paulydangerous]

Article from the CBC.

The budget surplus for the 2007-08 fiscal year is also heading for the stratosphere. In August, the Finance Department acknowledged that the surplus would top its original $3-billion projection. For just the first three months of the new fiscal year, Ottawa has already pegged the surplus at $6.4 billion.

When in opposition,

Comments

[hendrikboom]

Martin's first priority was paying down the debt -- until, that is, all the other parties ganged on him and made him divert funds to spending projetcs.

[harry_beast]

There's a story about Chretien during the 1990s budget cuts. Martin was laying out the budget. One by one, the other ministers would barge in with some new spending proposal. Each time, Chretien would tell them that they needed to stick to the program. Finally, after one too many interruptions, Chretien said that the next person who interrupted would get his budget cut by 10%. After that, things went more smoothly.

You have to hand it to him, Chretien knew how to lay down the law.

[sourdick]

I would guess with the way the dollar is working, and a million other economic factors, it is probably really hard to predict the surplus.

Theres a lot of Anti-Harper sentiment in this community, but even Harper-Haters have to admit that this is good news. Whether they decide to increase transfer payments, lower taxes, or pay down the debt, theres really not much to be angry about. Unless youre really scratching at the bottom of the barrel for old statements they made when they were the Opposition party?

[canticle]

It's good news, just as it was good news when the Liberal kept posting bigger than estimated surpluses, while the Conservative Zealots ragged on them for bad estimates.

[harry_beast]

In today's Globe and Mail, Jack Layton expressed outrage at the surplus, calling in undemocratic. Perhaps he meant un-New Democratic, given the NDP's aversion to sound finances.

Anyway, he's threatening to vote against the throne speech over this issue. Unless Gilles Duceppe's five non-negotiable (and unlikely to be fulfilled) conditions are met, the Bloc will also vote against the throne speech. So, that leaves the Liberals. Will they keep the government in power, as they did with the issue of Afghanistan, or will they pull the plug?

If the government falls, it's going to be interesting to see how the election is perceived by Canadians. Is a higher than expected surplus a valid reason to topple a government? I guess we'll find out.

[thanks4thefish]

It would be hard to argue that that's a valid reason to trigger an election, but I do think it would be useful to have an election debate around how the federal government arranges its finances...since they obviously are flush with cash, on an ongoing basis, should it be used to pay down debt? to endow health care? to help relieve the fiscal burdens facing other levels of government? In the end, whichever party is in power, there is never any real discussion on what these surpluses mean for fiscal policy.

[harry_beast]

In the end, whichever party is in power, there is never any real discussion on what these surpluses mean for fiscal policy.

The country would benefit from a debate about government finances, but I doubt that it would fly in an election. It's such a complex issue that it's hard to package into an election platform, and even if it came up in debates, it would probably degenerate into into over simplification (e.g. heartless budget cutters versus irresponsible spendthrifts). This issue often gets bogged down by bun fights between different layers of government and regional grievances. And finally, I think that politicians of all stripes as well as bureaucrats and civil servants don't really want the public involved; they don't like the scrutiny.

[thanks4thefish]

I'm no more pleased or annoyed with this pattern than I was when the Liberals did it. It would be nice if the Conservatives acknowledged either a)maybe the Liberals weren't lying all the time, or b) this tactic works...but I'm a realist.

I also don't really have a problem with the money going to pay down the national debt. You have to think eventually the feds will fall on hard times again, and reduced debt will make the choices easier when that time comes (although this has been happening for so long, one gets the feeling it will last).

But mostly, this tells me that the tax structure of this country is completely messed up. The federal government is gushing tax revenue...provinces (while there is a lot of variation of course) do alright, usually just about breaking even, give or take...meanwhile cities struggle to raise the funds to provide the most basic services, all through the property tax base. More than anything else, I think this pattern demonstrates that tax revenue needs to be redistributed more equitably and efficiently.

[tridus]

The stupid thing about how the Conservatives whined about Liberal estimates is that they were doing the right thing. The Liberal estimates were deliberately not optimistic, because even if unforseen bad stuff happened, they had a very good chance of holding up.

In the real world, we call that sound planning. Estimates for something as big as a national tax base are rarely perfectly predictible, given that we can't even get a 5 day weather forecast right. If you're going to error in one direction, caution is the right one.

That being said, I am happy we continue to have surpluses, and I'm happy to see it going against the debt. $700 million not being paid in interest next year is always a good thing. Both parties deserve high marks here, compared to how they behaved in the 70s and 80s when most of this debt was racked up.

[allhatnocattle]

While some may have predicted an $80+ barrel of oil, a rise in gold, silver, nickel and copper, few predicted a rise in all the resource sectors in combination with a free falling American dollar. Somehow this has translated into record surplus although I'm not sure of the how or why of it all. I had thought a par dollar was supposed to be bad for our economy, loosing our edge.

It was my understanding the Conservatives were spending like crazy according to critics, although I forget on what exactly.

While there have been cries to scrap the GST, lately this idea ha fallen by the way-side. The preference has been to pay down the debt, and to that I join in the cheer.

As a resident of Alberta, we get chastised with the stigma that we just got lucky in paying off our debt... "If it wasn't for the oil..." ...to which I always recall the sacrifices made by Albertans. But here we have arrived with the entire country at the same fork in the road