Harper, Flaherty And Deficit Obfuscations

Why am I not surprised by this:

Ottawa posts $1.7-billion deficit in August

The federal government posted a $1.7-billion deficit in August -- a signal that Ottawa may have difficulty balancing its books this year.

The monthly deficit reported Friday was the first since April and shrinks the accumulated surplus so far into the fiscal year to a five-month total of $1.2 billion.

While economists warn it is difficult to make judgments based on one month's accounting, the steep fall-off in the Canadian economy, particularly since this month's plunge in oil prices and stock markets, suggests the second half of the fiscal year will be worse for Ottawa than the first.

Funny - that is my thinking exactly.

Meanwhile, Finance Minister Flaherty continues his Mini Leader's tap dance of obfuscation and denial about budget deficits thusly:

Finance Minister Jim Flaherty said Thursday he still expects to have a small surplus when the fiscal year ends at the end of March, but admitted it will be tight and would not guarantee a surplus for the 2009-2010 period.

In the February budget, Flaherty predicted Ottawa would record surpluses of $2.3 billion this year and $1.3 billion next year.

Sounds a lot like incompetence to me.

But here's reality again, as further case in point:

August's shortfall was all related to a 10.1 per cent spending surge, in transfers to provinces and individuals and in departmental costs.

Revenue increased by a modest $100 million, or 0.5 per cent, during the month as a result of higher personal tax collections.

But corporate tax revenues were sharply down by $1 billion or 43.1 per cent, following a 15.7 per cent increase in July.

Now, let us not put aside the fiscal responsibility and spending restraint of Harper and his Harpies - to whit:

Still, the government's fiscal margins have become tighter following personal, sales and corporate tax cuts announced last fall, many of which came into effect in January.

For the first five months of the fiscal year, the government's budgetary surplus is down by $5.5 billion from where it stood last year.

The principal reason is the sharp increase in program spending -- $82.7 billion so far this year as opposed to $76.3 billion last year.

Other factors include a 9.6 per cent decline in goods and services tax collections as a result of January's one-point GST cut.

Not taking into account this, that, and this and that, and even this.

Once again: mea culpa, mea culpa vox populi, fellow Canadians.

We own what we got for ourselves.


Any questions?