Finance Minister Jim Flaherty has raised his estimate of our deficit from the $33.7 billion shortfall he forecast in January’s budget to a whopping $50 billion. The deficit will be the country’s first after more than a decade of budget surpluses.
Last November, the Conservative government projected budget surpluses, but January’s $40 billion stimulus package has changed all that. Now the finance minister is projecting lower federal revenues and higher EI payouts than previously expected.
Prime Minister Stephen Harper said yesterday that the deficits would not be long-term. “Our deficits are affordable but they will remain short-term,” the PM told Parliament, adding that they were modest when compared with deficits being racked up by other nations.
This may be so, but it’s small consolation to fiscal conservatives who fear that runaway spending is actually the root cause of the forecasted deficits, and that a balanced budget will be far more illusive than Mr. Harper and Mr. Flaherty are prepared to admit.