The Vancouver Sun carries a piece today quoting the Conference Board of Canada’s forecast that Ottawa should return to a surplus position one year ahead of schedule based on how the economy is unfolding. This must come as bad news to the federal opposition parties as they generally want only glum economic news so Prime Minister Stephen Harper and his Tories will look bad.
“If spending restraint can be kept on rack, the federal government should be able to balance its books a full year earlier than projected. The federal debt-GDP ratio will peak at about 35 per cent in 2010-11 — still well within manageable levels and significantly better than every other major industrial economy.”
– Conference borad of Canada
This assessment of Canada’s chances of returning to balanced budgets without raising taxes reinforces the government’s own position.
According to this year’s federal budget estimates, the deficit would be whittled down to $1.8-billion by 2015 due in part to cuts in the public service, a freeze on foreign aid, limited growth in military spending and higher EI premiums. But the board’s chief economist Glen Hodgson and senior economist Matthew Stewart argue the government is on track to be near surplus in 2014, or a year ahead of schedule.
How will Michael Ignatieff spin this, I wonder? Perhaps he’ll try to downplay the importance of Conference Board’s forecasts. Or perhaps he’ll just try to pretend nothing’s happened and Canada’s economic outlook is terrible. Nothing like a poorly run economy to spur a change in government.