In the Chamber -- Grant Mitchell's Blog

August deficit

Posted 11/3/2008 by Grant Mitchell


Several blogs ago, I wrote of the myth that Conservative governments can manage economies.  There is huge evidence to the contrary.  This Conservative government has taken the Liberals’ $13B surplus and in 2.5 years has ground it into what is surely a deficit. They have taken the top performing economy in the G8, which Liberals gave them, to the bottom performing economy in the G8.  Canada's economy has underperformed the US economy this year.  We have had nine consecutive months of diminishing productivity, the longest run of this kind in 50 years.

And now, after being reassured time and time again during the recent election by both Harper and Flaherty that their government would not run deficits, we have now seen reports of a $1.7B deficit in August.  This is the third month of deficit spending in the first five months of this fiscal year.  Now the government that said barely three weeks ago that Canada was not being affected by the world downturn is saying "we're in for rough times...Canadians should not underestimate what we're facing." Maybe if the government had not underestimated what we would be facing, we wouldn't be facing such a dramatic and stark economic reality.

The August numbers are $1.7B worse than August numbers last year when the books were at breakeven.  The net surplus for the year out of the five months for which there has been reporting is now just $1.2B which is significantly lower than the almost $7B net surplus that was recorded this time last year.  What's more disconcerting is that the economy from August to the end of the last fiscal year did not decline like the economy may well be declining from this August to the end of this fiscal year. Revenues will be much lower.

We are running a deficit. This is reminiscent of the Mulroney $43B deficit; Reagan tripling the deficit of the US and Bush creating a deficit over $1.0 trillion.

Like I said, why would anyone think Conservatives can run an economy?

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