The worsening recession will drive Ottawa $18-billion deeper into deficit over the next two years, a leading economist is predicting - an increase beyond existing government forecasts that appears set to push annual budget shortfalls into record territory.
The Toronto-Dominion Bank's calculations - using their updated economic forecasts - would see Canada's federal debt swell by $81.5-billion over the next two years instead of by $63.5-billion as the Harper government forecasted seven weeks ago. This would drive up Ottawa's debt to $540.2-billion in the 2010-11 fiscal year instead of $522.2-billion as currently forecast.
The Harper government offered what it said was a suitably bearish forecast in the January budget for national income this year, predicting it would decline by 2.7 per cent in 2009. But Toronto-Dominion Bank is now forecasting a drop of 4.5 per cent that would reduce the expected level of national income in the economy by another $31-billion.Second, an editorial that appropriately mocks the new government website that is a Harper-p.r. oriented homage rather than a substantive source of budget accountability: "Budget officer more important than PM photos."
"At a time when the Conservatives are about to plunge into murky waters of fast and loose spending, citing a national emergency -- Gee, remind us again just what Mr. Harper's gang had to say about the Liberals, Sponsorgate and accountability -- Canadians need Mr. Page's office to be on full alert, not facing the prospect of laying off veteran economists and analysts because the government has sheared his promised budget by more than one-third."
Just as Mr. Page did when he raised serious doubts about Mr. Flaherty's rosy projections in November's economic update that Canada wouldn't join the recession, and alerted Canadians to the fact that the Conservative government's poorly considered GST cut already had put the books in the red before the global recession hit us, his office serves a useful function in exposing the political malarkey citizens are fed.In the background, the lack of regulatory oversight over financial institutions in the American economy that is widely accepted as a cause of current turmoil. Yet counter-intuitively, Mr. Harper was decrying too much "red tape" in government last week during his big speech in Brampton on the economy (h/t Greg, for linkage). Seems like a no-brainer issue for the opposition to keep pressing the government on. Let it defend its resistance to accountability and transparency, yet again.
If Mr. Flaherty is conceding already that "mistakes will be made" in spending $40 billion in stimulus money, freeing up less than a million dollars more to keep the budget office functioning as intended is money well spent.
It's not as if looking at a few more photos of the prime minister on the action plan website provides us with any useful insight.
P.S. Facebook group, here.