Delicate balancing act

Hey there, time traveller!
This article was published 28/08/2015 (3896 days ago), so information in it may no longer be current.

OTTAWA — So let’s get this straight.

In the last three days, we’ve had Liberals accusing the NDP of planning to make big spending cuts to balance a budget, the NDP accusing the Liberals of being a tax-and-spend party and Conservatives accusing them both of having a scary agenda.

Yep.

It’s official.

We are down the rabbit hole here folks.

With seven weeks and three days left to go until election day, the parties this week took on the country’s finances and turned conventional wisdom on its ear.

But conventional wisdom isn’t all its cracked up to be when it comes to the realities of Canadian political parties.

First there was NDP Leader Tom Mulcair, who insists come hell or high water he is going to balance the budget. There is much skepticism that anyone can balance the budget right now, with oil prices still dropping, and the Canadian economy teetering on recession.

Mulcair feels he has no choice but to promise a balanced budget because of the tendency of Canadians to see the NDP as a bad economic manager. And with polls suggesting Canadians have a growing confidence in his abilities on that file, rocking that boat with a deficit budget would be a bad move.

Even if a poll this week suggests Canadians may not look so harshly at deficits.

A Nanos Research survey released Thursday showed eight in 10 Canadians think Canada is in recession and more than half think it would be fine to run a deficit to stimulate the economy compared to about one-third who oppose a deficit and a tenth who don’t know.

That is the kind of sentiment Liberal Leader Justin Trudeau was banking on when he announced Monday he will do just that. The Liberals plan a $10-billion deficit this year and won’t balance the budget until 2019, using infrastructure and other investments to stimulate the lagging Canadian economy.

Compared to Mulcair’s balanced-budget promise it sets Trudeau apart and if the Nanos poll is right it may not be as bad a strategy as it immediately sounds. But it is still a risky strategy in a country where balanced budgets have become akin to political Godliness.

The pledge unsurprisingly had Conservatives foaming at the mouth excited that the Liberals would step into this trap.

It helps, they believe, to paint Trudeau as the lightweight, spendthrift elitist they want him to be, and gives more credence to Harper’s claim he and he alone is to be trusted with the country’s finances.

But the fact the Conservatives continue to claim higher ground on the budget balancing front is puzzling at best.

The Conservatives’ talking points claim they increased infrastructure spending “by three times what the former Liberal government invested, all while cutting taxes and balancing the budget.”

The infrastructure spending part is true, and the Harper government did cut corporate taxes and has cut taxes for most individuals through various measures including cutting the GST, introducing boutique tax credits, adjusting income brackets and small increases to the basic personal exemption.

So far so good.

But balancing the budget is where the claim falls apart. Almost all the new infrastructure spending, and most of the tax cuts (with the noted exception of the GST cuts) have come since 2008, when the government began running deficits.

Yes, the deficits have decreased every year since 2009.

Yes, this year they claim the budget is balanced, but those claims are in serious doubt given the razor-thin margin they had ($1.4 billion) in April’s budget and the economic downturn in Canada in the first half of the year.

Yes, some of the years have been rocky economically. Yes, many economists say stimulating the economy is a good thing, and cutting spending when the economy is on the brink can hurt more than a small deficit.

But it doesn’t change the fact the Conservatives keep saying they have balanced the budget when they actually haven’t in seven years. This year very well could make it eight deficits in 10 years.

The Chrétien and Martin Liberals governed for a combined total of 13 years. They ran four deficits.

Before that the Mulroney government ran nine deficits over nine years, and the Pierre Trudeau government ran 14 deficits over 15 years.

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So really the Conservative record of balancing the budget at the federal level isn’t something to brag about. And yet they keep doing it.

Clearly, they’re operating from the manual that says if you say the same thing often enough, people will start to believe it.

Mia Rabson is the Free Press parliamentary bureau chief.

mia.rabson@freepress.mb.ca Twitter: @mrabson