Wednesday, February 25, 2009

Reasons for federal debt under the Conservatives

A note about a report on the CanWest sites at the moment: "Taxpayers group relaunches federal debt clock." It's the return of the federal debt clock, for the first time since 1997:
The Canadian Taxpayers Federation said Wednesday it was relaunching a federal debt clock now that the Conservative government is set to run up $85-billion in deficits over a five-year period.

Available at, it shows that the federal debt stands at roughly $458-billion, or $13,685 per Canadian taxpayer. The federation said the national debt is now growing at a rate of $34.88 per second.
OK, we know there's a deficit now under the Conservatives, but the explanations offered in the report are deficient:
The Conservative government engaged in deliberate deficit spending in an effort to combat the global financial crisis that is dragging the world economy into negative territory. Also, the move appeased political opponents after the Conservative government was nearly defeated following a fall economic statement that included no fiscal stimuli and questioned whether it would be needed.

The budget includes a two-year, $40-billion stimulus package that, when combined with contributions from the provinces and some municipalities, will come to 2% of GDP, or what the Group of 20 nations agreed upon in meetings late last year. (emphasis added)
So, reasons for Conservative deficit: global financial crisis; political survival; G20 agreement. But what's missing? The botched policies of the Conservatives that created a $13 billion deficit this year, principally the GST cuts combined with higher government spending. A deficit of the Conservatives' own making, in advance of any of the above. Their policies have exacerbated poor federal finances as the recession has kicked in, to the tune of between $46-$105 billion over the next five years.

If you're going to go to the trouble of laying out the reasons Canadians will be paying off a massive deficit, and you're a reporting entity, kind of important to be telling the whole story.