UPDATED: Senior government official scoops finance minister

Harper’s break with federal budget traditions might be a sharp political move


 

Update:

A Friday morning round-up of reaction finds most observers taken aback, as I was yesterday (see post below), by the government’s decision to release the deficit numbers that will be contained in next week’s budget. (By the way, I wouldn’t call this a “leak”; it was an overt and official announcement, even if the announcer’s name can’t be revealed.)

Bank of Montreal’s Doug Porter rather delicately calls the move “exceptionally unusual.” CBC terms it “extraordinary” in light of the “legendary” secrecy around budgets. No surprise that Liberal John McCallum slams it as “grossly irresponsible,” while CanWest accurately observes that the release “went beyond the traditional leaks” of less important budget details that became routine when Paul Martin was finance minister.

***

The decision by Prime Minister Stephen Harper to have a senior government official
release the deficit numbers for the next two years is a breathtaking break with hallowed federal budget traditions—and might just be a sharp political move.

Putting those huge deficit numbers out early—$34 billion in red ink for 2009-10 and $30 billion for 2010-11—leaves Finance Minister Jim Flaherty a fighting chance of making something else the big news next Tuesday.

No doubt, Flaherty and the PM hope the coverage on budget day will focus on the nature of their stimulus package, what sort of infrastructure, how much help for newly jobless Canadians, which short-term tax relief, and so on.

That senior government official (we’re not allowed to name him) declined to explain the dumping of the old doctrine that major budget information must remain secret until the budget is tabled. Perhaps there’s no great harm in putting out this information early.

Yet there’s something unsettling here. The practice of tabling the entire federal fiscal plan on one day is largely based on the idea that it’s impossible to understand one part without the context of the rest of the blueprint.

So today’s deficit revelation is nearly impossible to analyze. Are those huge numbers entirely justified by a solidly built stimulus package beneath them? We sure hope so. Or are they are the product of a vague, hastily slapped together wish list? Also quite possible.

And what about the basic economic assumptions behind the deficit projections? Earlier today, Bank of Canada Governor Mark Carney was looking ahead to the recovery he expects to start late this year and generate healthy economic growth in 2010.

Despite what Carney sees ahead, today’s unexpected numbers from the government envision a huge deficit in 2010-11. Does that mean the finance department is assuming lower growth than Carney next year, or that even with the solid rebound he anticipates in 2010, the federal deficit will remain punishing high?

Without all the other budget data that usually comes—on budget day of course—along with any deficit or surplus projection, we have no firm idea. These are just numbers, then, not information.


 
Filed under:

UPDATED: Senior government official scoops finance minister

  1. Obfuscation is being raised to an art form.

  2. So let me get this straight. When it comes to government spending, we now have the Minister of Finance, an unnamed Dept. of Finance official, and the Parliamentary Budget Officer all briefing the press?!? At least the Finance official can’t be named.

  3. Nice move .. if there is one thing I have learned form Harper is expect the unexpected. I would have never thought of such a move after all it’s one of those things that you assume wil be the way it always is. Brilliant! The more I think about the possible consequences the more it makes sense.

    • kc is right…today’s not one of your better days. Unless of course you like being toyed with by your elected representatives.

      • No I just like knowing the bottom line the rest I will leave to the rabble.

    • Another unexpected move? Holding the budget in an auto-parts factory.

  4. Having perused media online from other countries writing about government economic action, I note that Canadian media are the only ones who seem to be totally obsessed with the size of the deficit. It’s as though the deficit is the only aspect of economic policy (they think) they understand.

    I presume the reason for putting out the deficit information ahead of time is to try to focus media attention on the actual measures in the budget. It’s a sensible strategy.

    • It may be a sensible strategy, but it doesn’t mean that we all have to just look this way because they say so.

      • you can choose to look anyway you want.

  5. and might just be a sharp political move.

    Maybe. It looks to me like a panic reaction to yesterday’s news that there will be a $13 billion deficit even before a stimulus is added in. Since they have no way of spinning that bad news they’ve released the numbers on the budget deficit and will follow up with either “the coalition made us do it” or “it’s for the good of the nation” depending on whether they’re talking to the base or the rest of the country.

  6. I’m confused, surely not the only one. Does this mean that the “entire” fiscal plan will not be released on budget day? If it is, then how does this help, other than making sure we don’t all fall off of our collective perchs when we see the figures. Is he hoping we’ll all be still in shock and not notice that 10bil is going into a # Swiss bank account? Or is Steve just being Steve? If it blows up, well we all know who to go looking for now, don’t we?

  7. From what we’ve seen in the past, look for this October’s fiscal update to downgrade the deficit numbers, as the CPC anticipates election talk to heat up when Parliament returns for the Fall Session.

  8. Stephen Harper’s genius is so great, even his deficits don’t stink.

    CHESSMASTER!

    • Media have been agreeing to the stipulation that they not report the name of the “official” who is some political operative covering up for the ministers who are telected and paid to be accountable but are able to avoid it through these little manipulations.

      Media representatives need to start refusing the Spinvitation to attend and reporting that they refused to participate on principle.

  9. Hold on a minute …. will the MSM now question Harper/Flaherty on their hidden numbers ( remember many economist stated publicly they had cooked the books) …….

    Media release for LPC web site.

    The budget surplus that Stephen Harper and Jim Flaherty projected just eight weeks ago does not exist. The Liberal Party and Parliamentary Budget Officer (PBO) were deeply suspicious of Harper and Flaherty and that suspicion is now confirmed.

    The PBO is predicting that the budgetary deficit for 2009-10 will be $13 billion, even before any stimulus spending is allocated.

    In order for next week’s budget to earn the confidence of Parliament and of Canadians, the numbers can’t lie. Stephen Harper must be frank and honest with all of us about the true state of our economy and the steps necessary to dig us out of the mess his government has created.

    • Personally, I expect a balanced budget tomorrow, thanks to the planned sale of $34B in unnamed government assets. This is just a head fake.

  10. “Yet there’s something unsettling here. The practice of tabling the entire federal fiscal plan on one day is largely based on the idea that it’s impossible to understand one part without the context of the rest of the blueprint.”

    Are you 12?

    What’s unsettling here is that you are paid for political commentary without any knowledge of it. Do you not know of the “trial balloons” of the Chretien/Martin era? How the budget would leak out piece-by-piece over weeks? If not, you are not qualified for your job. If so, why the manipulation?

  11. Yeah, Could be a trial ballon—-the last time PM Harper released info about our fiscal situation we almost had a revolution. HE`s probably looking down the hall to see if there any troop movements amongst the opposition—–anybody hear coalition talk yet ?

  12. “Let me tell them that the way to manage this economy through difficult global times is not as the Liberal Party would do: to drive us into deficit.” Stephen Harper
    “We should think of the next generation and the generation after that. Why should we be living on borrowed money and asking the next generation to pay the costs? It is not fair intergenerationally. Most people would think it is not fair and would say that we should pay our bills as we go.” Jim Flaherty

    Is it just me or did I like the 2008 version of these guys much better?

    • It’s not just you, Dan, believe me…

  13. There is something really wrong with this pre-release of Canada’s fiscal budget. It is unheard of.
    People and markets around the world, some friendly and some not so, are waiting to hear where Canada stands financially and the direction Canada intends to go under the current Government.
    Releasing bits and pieces of Canada’s blueprint willy-nilly is a very disquieting move on the part of Canada’s government.

    I hope the emesem makes like a worthy estate and follows this up.

  14. well that would happen wouldnt it?

  15. Is it illegal or just politically damaging to have details of a federal budget leaked in advance? If illegal, name names and call the cops. If politically damaging, grill the finance minister and PM on how they let (caused?) this (to) happen. I can recall at least one provincial budget that was released a day or two early because details leaked out, in order for complete and true information to be in the public domain and available to all simultaneously. This reeks of political gamesmanship gone mad, and the potential for some insiders to know (and profit from!) additional information not yet widely disseminated is more than a fair question.

    Nail them on this, folks. It stinks.