Roundup: The expanded deficit

Posted on by

The big news yesterday was of course Bill Morneau’s fiscal update, in which he said that the deficit was slated to rise to $18.4 billion – and then everyone freaked out. But if you take a breath, you’ll see that in there is about $6 billion of wiggle room (or “fudge” as Andrew Coyne called it) when they adjusted down the growth projections of private sector economists – which have been particularly optimistic. As well, much of the current-year deficit is driven by lower revenues rather than new spending, despite what the Conservatives say, which is why the Liberals thought it clever to remark in QP yesterday in response to questions about the deficit that the Conservatives and NDP would be cutting all over the place in order to keep a balanced budget (to which Lisa Raitt, on the evening politics shows, rather indignantly replied “You don’t know that.”)

https://twitter.com/stephen_tapp/status/701799653826813952

As part of the changed fiscal picture, the “savings” the previous government booked for changing public service sick leave is now back in books (not that it would have actually achieved savings in the first place). Stephen Gordon wonders if spending to spur growth is the right policy when this period of low growth may not actually be temporary, but rather might be the new normal. Kevin Milligan on the other hand notes that because it’s so cheap to borrow right now that going into deficit won’t really cost as much in the future, as we are not in the same situation as we were 25 years ago. Maclean’s charts the worsening fiscal situation. Kevin Page has questions about the “holes” in the fiscal update. Morneau also hired Dominic Barton as a growth consultant, which likely means a focus on Asia.

https://twitter.com/MikePMoffatt/status/701796830795931648

https://twitter.com/MikePMoffatt/status/701797622537986049

Good reads:

  • The Duffy trial resumed, and the Crown wrapped up their case. (Reevely, Blatchford and O’Malley).
  • Scott Brison is looking to change how the Estimates cycle works in Parliament after it has devolved to a farce, but it’s too late for this year’s budget cycle.
  • A Liberal MP is looking to push a “good Samaritan” bill to shield people reporting drug overdoses from prosecution.
  • StatsCan confirms that youth voter turnout was up during the last election.
  • Most Liberals supported that motion to condemn the BDS movement, but a few abstained and one voted against.
  • The government is studying options for how to fix our “broken” bail system.
  • A retired British admiral has been hired to review our naval procurement system.

Odds and ends:

Health Canada has continued to use a predatory publisher for journal articles rather than admit they made a mistake.

The target of 25,000 Syrian refugees resettled in Canada is likely to be reached this week.

Trudeau has confirmed that he will march in the Toronto Pride parade, the first PM to do so.