Jim Flaherty vs. The deficit

The New Democrats and Liberals are unimpressed with the Finance Minister’s economic update. And Jim Flaherty faces the possibility that the federal budget won’t be returned to balance when the Conservative seek re-election in 2015.

Mr. Flaherty was asked at the luncheon about not being able to balance the budget during the Harper mandate, before an election scheduled for 2015. “I’ll be frank with you. I don’t play with numbers, the numbers are the numbers,” the minister bristled. He said it was not a “significant” amount.

He noted that $1.8-billion is “a little more than half a percent of the federal budget,” which is about $275-billion. “We are talking about relatively small amounts of money in the big picture,” he said. “The good news is we are on track.”

The government recently conceded that the deficit was structural.

Here is a chart from the CBC that details federal surpluses and deficits between 1963 and 2011. If you assume that today’s updated projections will hold true, the Conservatives will have run surpluses (non-adjusted) of $13.8 and $9.6 billion, followed by deficits of $5.8, $55.6, $33.4, $26.2, $26.0, $16.5 and $8.6 billion between 2006 and 2015.

As was noted around the bureau this afternoon, several of the Conservative party’s 2011 campaign promises were linked to a return to balance. Income sharing for couples with children under the age of 18, the children’s fitness tax credit, the adult fitness tax credit and doubling the tax-free savings account limit were all to be “implemented when the federal budget is balanced within our next full term of office.”