Retour des déficits à Ottawa

[ErickMontreal]

Retour des déficits à Ottawa........

 

* Presse Canadienne,

* 07:23

 

Un économiste croit que le gouvernement de Stephen Harper doit changer son approche en ce qui a trait aux dépenses du gouvernement pour éviter un déficit budgétaire.

 

L'économiste en chef de la banque Toronto-Dominion, Don Drummond, prévoit que le budget de l'année fiscale en cours, qui se termine le 31 mars 2009, sera équilibré.

 

Cependant, M. Drummond s'attend à un déficit de 10,4 milliards $ pour l'année suivante, et des déficits de 9,9 milliards $, 5,5 millions $ et 2,4 milliards $ pour les trois années suivantes.

 

Selon l'économiste, Ottawa sera obligé de diminuer les dépenses gouvernementales pour éviter les déficits au cours des prochaines années.

 

Même s'il ne croit pas au scénario de récession immédiate pour le Canada, M. Drummond prévoit néanmoins un ralentissement de l'économie canadienne.

[JCC-Fromthere]

C'est une des choses que j'aime pas du gouvernement Harper; c'est des conservateurs sociaux, pas economique. Ils vont reussir a retourner le Canada en deficit alors que les Liberaux l'avait elimine.

 

Oh well, on a ce qu'on merite I guess...

[Malek]

J'ai hâte de voir comment le gouvernement va tourner un surplus de 10 milliards en un déficit de 10 milliards, 20 milliards de plus de dépenses faut quand même le faire... à moins que ça soit juste du BS de cet économiste.

[Malek]

Change course or run deficits, top economist warns Ottawa

 

Grim forecast and fresh recession prediction pose a challenge to Harper and his cabinet

STEVEN CHASE

 

With reports from Brian Laghi and Heather Scoffield

 

October 17, 2008

 

OTTAWA -- The federal government is on track to run budget deficits in each of the next four years - as deep as $10-billion in two of them - unless the re-elected Harper Conservatives move to avert the red ink, a senior Canadian economist projects.

 

The forecast, which came as a second big bank predicted an imminent recession, suggests a big challenge ahead for Jim Flaherty, whom sources say will remain as federal finance minister when Prime Minister Stephen Harper assembles his post-election cabinet.

 

Keeping Mr. Flaherty in his post is aimed at avoiding an unsettling change of economic leadership as Canada grapples with spillover from global financial turmoil. Yesterday, the Bank of Montreal followed the Bank of Nova Scotia in predicting a recession, saying the economy will start contracting in the fourth quarter of 2008.

 

Toronto Dominion Bank chief economist Don Drummond forecasts a balanced budget for the current fiscal year ending March 31, 2009. But he projects a deficit of $10.4-billion in the next fiscal year, 2009-10, as well as a $9.9-billion deficit in 2010-11. He also forecasts deficits of $5.5-billion and $2.4-billion respectively in the two subsequent years.

 

His estimates are based on spending and tax plans as set out in the 2008 budget and assumes that revenue collected by the government will "soon begin to deteriorate" as the worsening U.S. economy drags down Canada.

 

"I really couldn't see a credible scenario in which they [deficits] didn't last for a long time," Mr. Drummond said.

 

The economist said his deficit projections show the Tories will be under pressure to trim spending.

 

"Many economists have said it's acceptable to run a modest deficit for a short period of time, but there's virtually nobody on record as saying it's acceptable to run deficits for many years in a row."

 

"I don't think you can tolerate a deficit of that magnitude going on for four years," he said of his projections.

 

The TD forecast does not predict a recession, but does say there will be a dramatic slowdown.

 

During the election campaign, Mr. Harper vowed to keep budgets balanced and not raise taxes, commitments that leave spending cuts as his only option. On the hustings, however, he dismissed questions about where he would reduce spending as "a ridiculous hypothetical scenario."

 

At the same time, however, Mr. Drummond said he thinks the government will be hard-pressed to balance the budget when facing potential annual deficits of $10-billion. He said it is hard to cut that much spending because many programs are politically risky to touch.

 

"If you want to get something like $10-billion [in savings], you've got to go and nuke a whole bunch of programs," said Mr. Drummond, a former federal Finance Department official.

 

"I can't imagine they will trample into things like Old Age Security and the major transfers to the provinces, and probably not defence while [the mission in] Afghanistan is still going on."

 

Mr. Drummond suggested the government may have to focus on later years for cuts. "I think they will have to cut [spending], but not necessarily in 2008 or 2009, when the economy will be at its weakest."

 

In its 2008 budget, the government forecast a surplus of $1.3-billion for the next fiscal year and modest surpluses in years after.

 

Mr. Harper is expected to take about 10 days or more to put together a cabinet. One senior Tory said he does not expect it to be unveiled until at least the last week in October.

 

But sources said Canadians can expect that Mr. Flaherty will attend the meeting of the Group of Twenty finance ministers Nov. 8-9 in Brazil, an event that will almost certainly take place after the cabinet is announced.

 

The Prime Minister will have to find a replacement for departing Foreign Affairs Minister David Emerson. It is possible, Tories say, that the capable and trusted Industry Minister Jim Prentice could be shuffled into the post, although Mr. Harper may want to keep that economic minister where he is.

 

There's a big question mark over the future of Agriculture Minister Gerry Ritz, who drew fire during the election campaign after it emerged he had made light of the listeriosis tragedy.

 

Mr. Harper, whose party the latest counts indicate won 19 seats more than in 2006, has a number of new female MPs with impressive backgrounds to choose from for his cabinet.

 

They include: Gail Shea, a former PEI cabinet minister; Lisa Raitt, most recently president and chief executive officer of the Toronto Port Authority; Shelly Glover, a Winnipeg police officer; and Kamloops-Thompson-Cariboo MP Cathy McLeod. A registered nurse, she offers the party a spokesperson on social issues that it has lacked.

 

http://www.theglobeandmail.com/servlet/story/LAC.20081017.TORIES17/TPStory/National

[JCC-Fromthere]

J'ai hâte de voir comment le gouvernement va tourner un surplus de 10 milliards en un déficit de 10 milliards, 20 milliards de plus de dépenses faut quand même le faire... à moins que ça soit juste du BS de cet économiste.

 

2 points of GST, you got a bunch of billions right there. That was an electoralist, short-term, misguided, stupid idea.

[Malek]

2% vaut 5 milliards par an, pas les 20 milliards présentés dans cet article.

[GDS]

These are the numbers for 2008

GST cut to 6% - 6 billion

Lowest Income tax bracket drop from 15.5% to 15% - 1.3 billion

Lowest Corporate Income tax backet drop from 22% to 21% - 1.3 billion

Small Business tax rate drop to 11% - 265 million

Increase personal deduction to $9600- 1.5 billion

 

Total: ~10.4 billion

2007 surplus: 9.6 billion

 

Added in 2009 +

another 1% cut in the GST - 5 billion

Tax-Free Savings Account - 50 million first year (but more than doubles each year)

Increase personal deduction to $10,100 - 900 million

Increase in spending of 3.4% - 6 billion (Dept of Finance reported that spending is up 8% this year tho - way above projections)

Diesel Tax cut - ??? (annouced during election)

Ontario becomes a have not province - 1.4 billion

 

So its gonna be tight.

[MTLskyline]

Harper said that he'll spend conservatively. I trust his judgment more than I trust the judgment of the NDP/Liberals who have crazy ideas for all sorts of social programs and new taxes. I believe that its ok to have a deficit if your country is having hard economic times. It is the Tories who have been paying down our debt after all.

[JCC-Fromthere]

Harper said that he'll spend conservatively. I trust his judgment more than I trust the judgment of the NDP/Liberals who have crazy ideas for all sorts of social programs and new taxes. I believe that its ok to have a deficit if your country is having hard economic times. It is the Tories who have been paying down our debt after all.

 

I'm sorry? The tories have paid way less of the debt than the Liberals. The Trudeau Liberals and the Mulroney Tories are the ones to which we owe this monster debt. The Martin/Chretien team killed the deficit and then the debt.

 

(Don't mention the GST introduction, it didn't bring in new revenues, it just harmonized a consumption tax that existed before)

 

The rate of government spending has grown under Harper.

 

Maybe I'll write this article for my blog about the debt that I meant to a while back.

[GDS]

The only reason the liberals paid down the debt more is because they were in power longer. The debt interest had fallen to 20% of revenues under them (from 33%) but there weren't any tax breaks. Now there have been some tax relief under the conservatives and the debt interest ratio has fallen to 13.5%.