Thursday, July 29, 2010

Budget deficit could be gone by 2015

From CBC:

The federal government should be able to eliminate the annual budget deficit by 2015, a year ahead of schedule, the Conference Board of Canada said Thursday.

A report by the think-tank said it all depends on the government sticking to its promises to constrain spending.

"A more positive fiscal outcome now appears to be unfolding," chief economist Glen Hodgson said in a commentary co-written with senior economist Matthew Stewart.

In its February budget, Ottawa projected a budgetary shortfall of $54 billion in 2010 but said annual deficits should be eliminated through spending cuts by 2016.

Fantastic, I hope it does. Really - whatever we can do to ensure the deficit is destroyed, and return to the black, is something we need to consider.

But the real question is whether or not we'll return to black ink. The question is how we'll do it, and what we need to do with that surplus afterwards.

I predict two visions to come out of such a line of questioning.

The first, the Conservative argument, will be that constrained public spending on things like healhcare, education, infrastructure, and (gasp) the long-gun registry, will bring us back to surpluses. No need to raise taxes (even though they already plan on it), and certainly no need to bring the Liberal-socialist-separatist government into power.

The aftermath? Who cares! Long-term planning is for suckers. Certainly, increased funding for more prisons to help "tackle" crime, more corporate tax cuts, and less detrimental attention to our environment, are just a few things we can do with our new surplus.

The second vision, the Liberal vision, is that while constraints are needed in order to avoid continuing to add to this deficit, we should not give up investing in the infrastructure that allows Canadians to live the great lives they currently do. Arbitrary programs, like self-promoting ads, need to be cut. Making sure we get the lowest price and best product through competition, instead of blindly giving companies a $9-billion dollar patronage. Heck, we've done this before - we know what needs to be done. And while raising taxes is not a route we'd like to avoid at all costs, it's foolish and short-sighted to completely take it off the table.

When we do return to surplus, we know we have to invest in our children's future, ensure that our healthcare system does not suffer for long from any possible cutbacks it suffered, and work to increase trade and business in this country. We need to promote green tech, in order to help manufacturing to be competitive in this new world, and help our environment become sustainable at the same time. We need a long-term vision for what Canada should do after we return to surplus - not short-sighted partisanship.

I can't wait 'til the next election.

(Oh, and yes, there is the NDP vision, but who wants to listen to rants against corporations and the need to cancel free trade deals?)

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