By: Don Newman
The Trudeau government is working towards a late March date for Finance Minister Bill Morneau’s first budget.
March 22, 23 or 24 are the most likely dates for a budget that, as promised in the federal election campaign, will run at least a $10-million annual deficit.
But developments since the election have raised two problems for the rookie finance minister as he plans the policies, programs and priorities for Canada’s increasingly troubled economy. As he conducted a fact-finding consultation in cities across the country this week the problems were becoming clear.
Each day the dollar was closing lower and the price of a barrel of oil was also down. So, it turned out, was both consumer confidence and business confidence according to the most recent polls.
That has raised the question of how big the deficit in the first Morneau budget will or should be.
Will the Liberals’ promised deficits of $10-billion a year for three years to spend on job creating infrastructure projects, then balance the budget in the fourth and last year of this mandate, provide enough stimulus for an economy that seems to be slowing down by the day? And will the slumping economy produce enough revenue to fund all the other programs of the federal government and limit the borrowing by Ottawa to just $10-billion?
The answer to both questions appears to be no. In fact after dodging the worst of the global slowdown of 2009 and 2010, the Canadian economy seems to be slipping into the vicious cycle of declining government revenues and increasing government expenditures last seen in Canada during the recession of the early 1990s.
Now Morneau is being counseled to delay his budget at least into April to better understand just where the national economy is headed. After all, last year Conservative Finance Minister Joe Oliver delayed his budget a month to try and figure out where oil prices were heading.
(As it turned out the delay didn’t help Oliver. He forecast oil prices almost double the $29.60 a barrel they are currently trading at, juggled some of the figures and claimed the budget was balanced. As we know, the Conservatives then lost the election.)
But others are worried that even an end of March budget is not soon enough to steady nervous Canadians worried about their jobs, and perhaps their homes and retirement investments. They argue an earlier rather than a later budget is what is needed.
So far the Liberals have been basking in the post-election honeymoon glow. But they should be ready for the glow to begin fading when Parliament returns for its winter session on January 25th. And it will disappear entirely after the budget is brought down, whenever that turns out to be.
The old maxim says that to choose is to govern. With the looming decisions awaiting in budget 2016, the governing is about to begin.
Don Newman is Senior Counsel at Ensight Canada and Navigator Ltd. A member of the Order of Canada and a Life Member of the Parliamentary Press Gallery.