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Reuters gets hold of the latest projections from the Parliamentary Budget Officer.

Mr. Page forecasts a deficit of $48.6-billion this year, slightly lower than the government’s estimate of $50.2-billion. But he projects a shortfall of $41.3-billion in 2010-11, $27.6-billion in 2011-12, $21.6-billion in 2012-13 and $16.7-billion in 2013-14. He says the deficits from 2012 to 2014 will be structural rather than cyclical, but small nonetheless at less than 1% of GDP.

Time for another retrospective?

Feb. 5, 2008. “The way to manage this economy through difficult global times is not—as the Liberal Party would do—to drive us into deficit.”

Oct. 14, 2008. “We’ll never go back into deficit.”

Oct. 17, 2008. “I believe, based on everything I’ve seen so far, that there’s no reason why the government of Canada won’t stay in balance, why we can’t maintain a balanced budget this year,” Harper said, speaking after a meeting in Quebec City with French President Nicolas Sarkozy. But for future years, he said it would be premature to say if his government will be able to maintain a surplus. “Others are speculating about future years. I don’t think we’re yet in position to know all the information in that regard and I think it would be premature to speculate on that.”

Nov. 6, 2008. “One message was very clear. Don’t be afraid to run a deficit if the deficit is in the best interests of the economy.”

Nov. 24, 2008. “The government of Canada today is in surplus,” he said Sunday at the conclusion of the summit. “The government of Canada today is not planning a deficit. But if the government of Canada decides … that we do have to engage in fiscal stimulus, that government spending is essential not just to shore up economic activity but investment markets, that would be the occasion we would go into what would be called a cyclic or a short-term deficit. But we would only do that if we can assure ourselves that we can do that while preserving a structural surplus, that any return to a normal level of economic growth will immediately take us out of deficit. And that’s the only condition under which we would consider that set of actions.”

Nov. 27, 2008. “Mr. Speaker, as I have said many times, Canada is not currently running a deficit and this is thanks to the good management of the Minister of Finance, who will present his economic and fiscal update later today.”

Dec. 1, 2008. “If we run a deficit of $30 billion in this country, we are running a structural deficit. It took a long time to get out of that problem. We have taken the long-term view, the view that says we have to help Canadian business with the Bank of Canada, with Bill C-50, with ensuring adequate credit in this country. There are more provisions in that regard in the fall economic statement, all good for the country, not running big deficits.”

Dec. 16, 2008. “We’re going to have to run a deficit, do some spending measures we hadn’t planned on doing, but I think, if we do those things, we should be able to come out of this (economic downturn) pretty strong in due course.”

Jan. 23, 2009. “I think we’re in a rare time where you need a deficit.”

May 14, 2009. “Our deficits will be large, but they will be temporary,” Harper told Quebec municipal leaders gathered for an annual convention. “In fact, in the short term, they will be as large as they have to be to help us weather this recession. As a country, we can afford it. But only if these deficits are temporary and our stimulus spending ends when the recession ends.”

May 26, 2009. “We will run a substantial short-term deficit this year which I would estimate at more than $50 billion.”

June 11, 2009. “Our deficit will be significant but is affordable.”

June 13, 2009. “He’s wrong,” Flaherty told journalists in a conference call from a G8 finance ministers’ meeting in Lecce, Italy. “Because he says growth rates likely will be slower than I had predicted. Now, if you make an assumption with respect to lower growth rates, then you get the results that he postulates. But anybody can do that.”

June 25, 2009. “If you take out the one-time spending, we have a deficit of only about 1.5% of GDP and we should easily recover from that in the two years following the recession.”

(Note: Most are the comments of the Prime Minister, but a few are excerpted from remarks of Finance Minister Jim Flaherty.)


 

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  1. It was never realistic for Harper, or others, to claim that Canada would never return to deficits–even in the event of a recession. But we should have realized that at the time.

    The shocking part of all this is that the financial and media elite in this country spent years decrying deficit spending–under any circumstances–even though economists of nearly every stripe now admit that it would be disasterous for us to actually follow that advice.

    The lesson we should take away from this is that we were wrong to buy the old line–and expect our politicians to parrot it–not that we're wrong to do what needs to be done now.

    • uhmmm ok. I agree with much of what you said. but i think the post speaks to more than parroting, no?

      • How so?

        To clarify:

        Harper got into to this mess, not by running deficits, but with his previous claims that he would never, ever do so under any circumstance. And Harper WAS parroting that anti-deficit line–not only was it not of his own creation but it was, in fact, largely created by the Liberal Party and the Bay Street elite.

        The point is not to absolve Harper–he deserves huge raspberries for jumping on the blind anti-deficit bandwagon and doing so quite early on–but we have to recognize the real problem is not Harper's position now nor the fact his position has change; the problem is the failure of our political system to realize that his original position was obvious BS in the first place.

        We should be examining the reasons why by the Fall 2008 every political leader in this country was convinced that it was political suicide to admit the obvious: that deficits are sometimes necessary. Instead we're exacerbating the "gotcha"-game that got us here in the first place with accusations of flip-flopping. WTF?

        • Maybe we could apply the approach you are suggesting to some other issue… say, Harper's position on taxes give the permanent structural deficit he has created?

          • I think that Harper's tax cuts were are completely unwise and–given their size relative to the Page's estimates–we clearly wouldn't be in a structural deficit if Harper and the Liberals had not enacted them, but I don't think the comparison really holds.

            Harper and the Liberals passed the majority of Harper's tax cut package back in the fall of 2007–when no one knew we would be in a recession anything like the one we're in now. In fact, even Kevin Page's earlier budget estimates–made several months ago but after the recession began–predicted we would be out of deficit within five years.

            So, Harper's tax cuts are awful–and without them wouldn't be in the fix we're in–but I don't think it's at all fair to say that it was obvious that would be the case at time. In this case–"no deficits, ever"–it was clear that that was dumb/dishonest at the time, not only in retrospect.

        • Thanks Ray, your further post helped me understand some of the what you were thinking and I agree with all of it.

          I guess I would only add that I also think there is a matter of at least incompetence or purposefully misleading the electorate given we now know from the work of the PBO that the deficit was real well before the Tories dropped the 'no deficit' line that you accurately describe (in both nature and effect).

          • "we now know from the work of the PBO that the deficit was real well before the Tories dropped the 'no deficit' line that you accurately describe (in both nature and effect)."

            Absolutely, and I think it was clearly "purposefully misleading the electorate" rather than simple incompetence. This was best evidenced by the economic update that was released after the election–i.e. not during the prime time of "gotcha" politics and fear mongering–and well after it became obvious to anyone with a pulse that there simply WOULD be a deficit whether one thought it was the right thing to do or not.

            I still don't understand what the Tories were trying to pull with that one. Perhaps they wanted to get their public financing changes through before dropping the bad news, but their budget projections were so comical that they actually made it easier for the opposition parties to oppose the economic statement without looking like they were only interested in protecting their own budgets. Dumb and dishonest.

          • Given their actions in the lead up to and during the election and during the fiscal update, I simply think that their calculation is that Canadians are disengaged, uninformed and/or dumb and they are willing to make opportunistic plays based on that calculation. Very similar to the end o the Harris/Flaherty reign in Ontario. It will catch up to them soon enough.

  2. Clearly Wherry is just Liberal hack!!!

    • You mean Page is a Liberal hack, right?

      After all, he keeps coming up with these economic projections that don't mesh with TheStrategist's pronouncements, and worst of all, he keeps being — at least, directionally — right.

      Harper can't catch a break from all these Liberal appointments. If only we knew who appointed Page …