While saying the federal Liberals deserve credit for showing “some restraint on spending,” Parliament’s former budget watchdog told a business audience in Ottawa Wednesday the government is still relying on accounting “hocus pocus” to find the money to fund new initiatives.
Kevin Page said the federal budget released Tuesday includes praiseworthy ideas such as skills training programs for Indigenous peoples, more funding for First Nations child and family services and billions in new cash for scientific research at universities and other facilities.
“Putting money into science is a knowledge-based economy is probably not stupid,” Page, who served as the first parliamentary budget officer from 2008 to 2013, said during a post-budget analysis breakfast event hosted by OBJ and the Ottawa Chamber of Commerce.
But the well-known economist, who is now the president and CEO of the University of Ottawa’s Institute of Fiscal Studies and Democracy, told the audience of more than 100 people at the National Arts Centre the Liberals haven’t fully explained how the government plans to finance its planned $21.5 billion in new spending over the next five years.
Instead, Page argued that Tuesday’s budget relies on vague new estimates of departmental spending and contains incomplete information on how the Liberals’ numbers add up.
“There’s no transparency from a parliamentary perspective of where this money comes from,” said Page, a frequent critic of federal politicians and bureaucrats whose 2015 book Unaccountable: Truth and Lies on Parliament Hill called for an overhaul of the public service.
“Where did that money come from? To me, that’s hocus pocus.”
‘What happens when something goes wrong?’
Finance Minister Bill Morneau’s third budget is forecasting about $3.3 billion in new revenues for 2018-19 thanks to Canada’s surging economy. At the same time, the deficit is slated to hit $18.1 billion in the next fiscal year, with no timeline for balancing the books.
Conservative finance critic Pierre Poilievre, the member of Parliament for Ottawa’s Carleton riding, told the crowd the Liberals have “inherited great fortune” in the form of a booming U.S. economy, rebounding oil prices, historically low interest rates and a sub-80-cent dollar that makes Canadian exports more competitive south of the border.
Despite all that, he said, the government continues to add to Canada’s federal debt at a time when it should be socking away money to help weather the storm once the inevitable downturn comes.
“With everything out of our control going right, what happens when something goes wrong?” said Poilievre.
The former federal cabinet minister told the audience the 367-page budget document contains only two pages devoted to the North American Free Trade Agreement and contains no contingency plan should the U.S. decide to pull out of the pact.
“Far from preparing us for that rainy day, (the budget) is actually adding to the problem by running an $18-billion deficit in all of these good circumstances,” he said.
Page said that although the Liberals plan to whittle the deficit to less than $10 billion by 2022-23, the country’s growing debt load still worries him. A sudden economic downturn could throw the government’s projections out of whack, he said, and future generations of Canadians will be left to foot the bill.
“Do we really need to generate $100 billion of debt in this economy?” he said. “I have a hard time with that. The Visa bill is moving. Nobody really wants to hear about accountability. Nobody really wants transparency.”
Running deficits is a prudent strategy to help kickstart the economy during periods such as the Great Recession that began in 2008, Page added, but he said it’s time for the government to rein in its big-spending impulses.
“I like balanced books,” he told the audience. “If we want it, we have to pay for it. It’s not fair to run these deficits and pass the debt on to future generations. If we want pharmacare programs and all the rest of it, you’ve got to pay for it.”