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In the teeth of market turmoil, Mulcair pledges balanced budget

But Tom Mulcair’s audacious pledge comes in the wake of far more cautious promises from the NDP’s star recruit


 
NDP leader Tom Mulcair speaks at a rally in Ottawa on June 17, 2015.(Justin Tang/CP)

NDP leader Tom Mulcair speaks at a rally in Ottawa on June 17, 2015.(Justin Tang/CP)

NDP Leader Thomas Mulcair’s promise not to run a deficit in 2016-17, if he’s prime minister then, has to rank as one of the more audacious pledges made so far in this election campaign. In fact, Mulcair’s commitment is far bolder than the cagier comment one of his star recruits made when asked about ending deficits only last weekend.

Speaking on the campaign trail today in Hamilton, Mulcair conceded he has little control over the 2015-16 books, when the budget remains largely in Conservative hands, but sounded supremely confident when he vowed to balance them the following fiscal year. “We know, because we’ve got a lot of experienced people, that governing is about priorities,” he said by way of explanation. “Our priorities are not the same as Mr. Harper’s.”

One of those experienced people the NDP leader might well have been alluding to is Andrew Thomson, the former provincial finance minister in Saskatchewan’s NDP government, and now Mulcair’s star candidate in the Toronto riding held by none other than Joe Oliver, who is, of course, Prime Minister Stephen Harper’s finance minister.

Related: An interview with Andrew Thomson on our politics podcast

Speaking on behalf of the NDP last weekend on CBC Radio’s The House, Thomson was noticeably more cautious than Mulcair was today, when asked if an NDP government would balance the budget. “You know, we have no idea what the current state of the books are,” he said. “In the longer term, the budget has to come into balance; I think there’s no doubt about that. Whether that happens in Year 1, I think, depends on what kind of a mess the Conservatives have left.”

Sometime between last Saturday and today, the NDP’s official take on ending deficits evidently hardened from Thomson’s hedged “in the longer term” to Mulcair’s unambiguous, “Our first budget will be a balanced budget.”

It’s far from obvious how Mulcair can be so sure. Even before yesterday’s stock market plunge, the economic outlook—and hence expectations for federal tax revenues—was unsettled. Back in late July, after the Bank of Canada cut its projection for Canadian economic growth this year, the independent Parliamentary Budget Officer (PBO) projected a $1.5-billion deficit for 2015-16, followed by another small deficit, $100 million, in 2016-17.

Mulcair commented on the PBO’s deficit forecast then, noting that the low price of oil was hurting the Canadian economy and, by extension, Ottawa’s tax-revenue haul. “The Conservatives put all of our economic eggs in the resource-extraction basket and, now that that sector is having considerable difficulty, it’s affecting everything else in the Canadian economy,” he said.

An NDP government wouldn’t be able to do anything about the Canadian economy’s reliance on oil within a few short months of the Oct. 19 election. So that reality will loom over the drafting of next winter’s federal budget, no matter who’s in charge. To the degree that the price of oil is a big deal for Canada, that worry hasn’t eased this week, as the price plunged on Monday before recovering somewhat today.

But deepening economic uncertainty goes far beyond oil, or even commodities in general. As our Chris Sorenson observes here, economists don’t have much useful experience assessing how businesses and consumers will respond to global anxiety that starts with China’s stock market cratering. (The Wall Street Journal‘s Greg Ip and Bab Davis write about China’s “murky politics, unreliable data and opaque decision-making.”)

All of which is to say that the prospects of Canada’s federal deficit vanishing soon were iffy already, but, after this week’s market turmoil, Ottawa’s fiscal outlook feels even more difficult to forecast with real confidence.


 

In the teeth of market turmoil, Mulcair pledges balanced budget

  1. Any fool can balance a budget…..just whack off whatever huge amount is necessary to do so.

    It may not be a good thing for Canadians or for the country, but it IS doable.

    Doing it safely is quite another matter.

    • Yes any fool can balance the budget , Mr. Trudeau said that budgets will balance them selves so whats the worry? Just get all your economical advise from Emilyone.

  2. I look forward to seeing the fully costed platform from the NDP. They are going to give us that before the election, right?

  3. It seems the NDP carries a lot of toilet paper around with them lately on the campaign trail, every time Thom speaks, they need something to put under his mouth to catch the bull poop, so I would suggest the ‘Royal’ brand, it has a triple layer of paper, and if it gets that bad, and may I recommend, baby wipes, for that tough bull dung that hangs around the edges of his mouth.

  4. The Prairie NDP governments seem to have been able to govern with fiscal sanity. Hopefully this means that Andrew Thomson would make a fiscally sane federal finance minister. Hopefully.

    • I believe he is running a riding where the NDP got about 10% of the vote last time around, and has been solidly liberal both provincially and federally for years, until Oliver won it in the last election. It is hard to believe Thomson is going to win this riding.

      What he probably will do is ensure it stays with the CPC.

    • The Manitoba NDP have destroyed our provincial economy. Only the Ontario Liberals have wasted more money and raised taxes higher than the Crew on Broadway in Winnipeg.

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