QP: Flailing about the deficit

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Fallout from the financial update was still front and centre, and Rona Ambrose was off the mark to insist that deficits meant higher taxes in the long run. Trudeau immediately went into his talking points about investment and growth. Ambrose tried to burnish her previous government’s fiscal record, and claimed that our world leadership was in jeopardy (if it even existed). Trudeau hit back that Canadians didn’t believe in the Conservative record. Ambrose demanded immediate action on pipelines to create jobs, but Trudeau insisted that the only way to get projects off the ground was to do it in an environmentally responsible way. Maxime Bernier was up next, and railed about the size of deficits, to which Bill Morneau, without notes and in French, responded with points about investing in the economy. When Bernier pressed, Morneau insisted that the Conservatives left them in a hole that meant they had to start further behind. Thomas Mulcair got up next, and insisted that there was no firm commitment for Bombardier to do maintenance in Canada. Trudeau praised the agreement and everything it offered. Mulcair asked again in English, bringing in the Aveos contract, but Trudeau insisted that they were supporting the aerospace industry. Mulcair turned to EI benefits, and demanded immediate reforms to hours and eligibility, and Trudeau agreed that they were making changes. Mulcair asked again in French, and got the same answer.

Round two, and Lisa Raitt turned to testimony at the Finance Committee about running a balanced budget putting them into recession (Morneau: You said you wanted to balance the budge at all costs, meaning tens of billions of dollars of cuts), and his deficit figures (Morneau: We plan to do something about the low growth bequeathed to us the previous government), Gerard Deltell insisted that they left the Liberals a surplus (Morneau: A few months does not make a year), and Kevin Sorenson worried about the growth in debt (Morneau: You guys added $150 billion to it). Guy Caron repeated Kevin Page’s questions about the new deficit figures (Morneau: The economy is volatile). Pierre Poilievre recycled yesterday’s question about taxing stock options (Morneau: We are investing in innovation), and Colin Carrie worried that Ontario taxes were being imposed nationally (Bains: We are investing in manufacturing). Hélène Laverdière asked about Canadian arms sold to Saudi Arabia being used in Yemen (Lametti: The minister asked the department to investigate).

Round three saw questions on foreign consultants used for the shipbuilding strategy, the Toronto Island Airport, refugee resettlement, the Comox Coast Guard station, the minister of justice’s husband’s lobbying activities, the definition of combat, milk proteins vis-à-vis Supply Management, Sockeye salmon, the tourism industry, Bombardier, and Site C Dam.

Overall, the finance exchanges were a little better than yesterday, however Raitt remained lacklustre, and the wounded tone of the Conservatives insisting that the Fiscal Monitor showed a rounding error of a surplus is not only a little tiresome, but it also betrays that perhaps they’re not actually sure what the Fiscal Monitor means. As well, the scripts were egregious today, which is disappointing because some MPs, particularly on the government side, have been really great about learning their files. (Morneau, incidentally, has improved dramatically with his French responses, and is giving them off the cuff).

Sartorially speaking, snaps go out to Joyce Murray for a fuchsia jacket with a black top, and to Michel Picard for a black three-piece suit with a crisp white shirt and a bright orange tie and pocket square (as he can actually pull orange off). Style citations go out to Robert Sopuck for a brown corduroy jacket with a taupe vest, blue shirt and orange tie, and to Karen McCrimmon for a grey jacket with a black forest-pattern printed across it.

5 thoughts on “QP: Flailing about the deficit”

  1. Strange I remember a time when Maynard Keynes and Bretton Woods was all the rage, deficit spending was the way to go and the public bought into it. Today all you ever hear is cut taxes and balance the budget, which sounds to me like economics for simpletons. The Government may have to raise the GST by 2% simply to have the funds to function and provide services etc. I really do not see the problem with that at all if it is what is required.

    • Some of the provinces have taken up those tax points, so raising the GST would really negatively impact them.

    • It looks like the laissez-faire economic idea is slowly dying out, and a sense that yes, there is a role for government in managing the economy. If the growth in debt is less than the growth in GDP, then there should be enough growth in tax revenue to service any additional debt. That’s what Trudeau is counting on by spending on infrastructure.
      Unfortunately, Harper cut taxes without any idea of how he was going to finance the business of government, and his added debt ballooned to $150 billion at a time when the economy was sputtering. Starting in 2012, he tried to cover his mistakes with a slash and burn policy on the civil service, and selling/privatizing public resources to raise money, in order to present a balanced budget in an election year. All he did was cripple the ability of the civil service to deliver services, proving once again that you can’t starve the beast.

    • Raising the HST at a time when consumer debt is maxed out is probably a bad idea if you want to get money into circulation. Canadian corporations, however, are sitting on around $600 billion in cash assets, much of it in offshore holdings, and they aren’t spending it. I’m not sure if the Libs have the yichees to go after some of this and get it moving again.

      • I see individual debt as a personal problem based on lack of discipline at home and not really the problem of the government since it does not control how people spend their income. As for Corporations, politically speaking the government will have to find a way to sell the idea to them that they have to contribute more, this would require putting the Citizens first and foremost and imposing controls on company profits which might backfire since most of them are foreign owned.

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