Leaders doing budget dance

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This article was published 27/08/2015 (3667 days ago), so information in it may no longer be current.

OTTAWA — As volatile stock markets stoke global financial worries, the three main party leaders are tripping over each other this week about who will or won’t balance the budget, when and how.

NDP Leader Tom Mulcair, fighting the stereotype the NDP couldn’t fiscally manage their way out of a bank vault filled with cash, is adamant under his watch, the budget will be in the black.

“I’ve been categorical,” he said Wednesday. “We will not be running a deficit. Our choices will be different from Mr. Harper’s.”

His comments prompted one of the sharpest attacks of the campaign thus far from Liberal Leader Justin Trudeau, who argues Mulcair will have to make cuts that will hurt the economy.

“Let me tell you this my friends, the choice in this election is between jobs and growth or austerity and cuts,” he said Tuesday. “Tom Mulcair chose the wrong side.”

Trudeau is taking a nuanced position and refuses to say whether he can balance the budget because he doesn’t know the size of the “mess” the Conservatives are leaving behind.

Today, Trudeau is expected to nail down the last major plank in the Liberal election platform: a multibillion-dollar plan to stimulate economic growth by investing in public infrastructure.

The Liberal leader’s infrastructure policy is expected to include significant new funding for public transit and transportation, affordable housing; and helping communities adapt to climate change, which has been blamed for billions in damage from flooding, wildfires and hailstorms.

For his part, Stephen Harper says neither of his opponents can be trusted. Trudeau, Harper said Monday, has “given up trying” to balance the budget and Mulcair “will bring in an avalanche of tax increases that in theory will balance the budget.”

Harper says his plan is the only right and trustworthy course, what he calls a “low tax plan for jobs and growth.”

That economists care far less than campaign strategists about a budget balance is a fact, noting small deficits aren’t always horrible if it keeps the economic engine firing. Spending cuts for the sake of a balance can have as much of a hit on the economy than running a small deficit, if not bigger.

But in modern Canadian politics, the state of the budget balance has become a rallying cry for fiscal management.

Ian Capstick, managing partner at communications agency MediaStyle and a former NDP communications staffer, said that’s because of the narrative skillfully created by former prime minister Jean Chrétien in the 1990s, perpetuated by the Harper government today.

“(A deficit is) almost the third rail of Canadian politics,” Capstick said.

Darrell Bricker, CEO of Ipsos Global Public Affairs, said there are times when voters are willing to forgive a deficit, such as when the economy was in need of some stimulation in 2008, when the Harper government ran a $55.8-billion deficit.

“But, unless the circumstances were as then, I expect that any leader or party proposing a deficit today would be seen as giving up on their responsibility to be sound economic managers,” Bricker said.

‘Let me tell you this my friends, the choice in this election is between jobs and growth or austerity and cuts’

— Liberal Leader Justin Trudeau

However Frank Graves, president of EKOS Politics, said he has noticed a decline in voter concern with deficits and austerity in the last few years.

“This is particularly true outside of the Conservative base where a clear and growing majority place more emphasis on investment, particularly to get the economy growing and progress restarted,” Graves said.

He said NDP and Liberal voters currently place very low emphasis on deficits. If true, Trudeau’s position is likely more tenable than it may have been five or 10 years ago.

A recent Leger Marketing poll found a quarter of Canadians listed deficit and sound fiscal management as an issue in the election, compared with more than one-third who cared about stimulating the economy, helping the middle class and job creation.

Harper’s big hope to stay in office right now comes from convincing voters either the Liberals or the NDP would run deficits and he wouldn’t. Of course, this conveniently ignores the seven straight deficit budgets his government ran between 2008 and 2014, and the legitimate question about whether this year’s budget will be balanced.

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Harper used to be considered the best to steer Canada through economic tough times, but recent polls say Canadians don’t believe that as much as they used to.

For Mulcair, if he suggested for a second the budget might not be balanced, he would “open himself up to massive attack,” said Capstick. “All hell would break loose.”

— with files from the Canadian Press

mia.rabson@freepress.mb.ca