Newspaper article The Canadian Press

Editorial Exchange: Make Deficit Policies Suit the Economy

Newspaper article The Canadian Press

Editorial Exchange: Make Deficit Policies Suit the Economy

Article excerpt

Editorial Exchange: Make deficit policies suit the economy


An editorial from the Halifax Chronicle Herald, published Aug. 28:

The federal election campaign has shifted into a fight over who would be the "best manager" for the economy -- not surprisingly when Canadians are saying a weak economy is their major concern and when a Nanos Research poll says 79 per cent of respondents are concerned Canada is in a recession.

But campaigns have a way of turning complex issues into simple lines in the sand. And this one has quickly become all about who would or wouldn't run a budget deficit (which 54 per cent of the Nanos polls respondents were open to).

Conservative Leader Stephen Harper, NDP Leader Thomas Mulcair and Liberal Leader Justin Trudeau have now all drawn their deficit lines in the sand.

Mr. Harper says his current budget is in surplus, despite a July projection by the Parliamentary Budget Office (PBO) that the budget is on track for a small $1-billion deficit this year. He's hammering the message that it's sound economic policy to keep the budget balanced, but hasn't said how he would do that (or why) if a downturn persists. But his response to the last recession was to run seven annual deficits.

Mr. Mulcair says Mr. Harper hasn't balanced the budget, but the NDP would balance it next year and thereafter. The NDP leader says he won't "entertain" the idea of a deficit, despite his belief the economy is faltering. And he has yet to show he can pay for costly promises -- a $5-billion day-care program, a small-business tax cut and more generous health transfers to the provinces -- by axing the income-splitting tax break, raising the corporate tax rate (he hasn't said by how much) or cutting other spending.

Mr. Trudeau is the deficit dove. Arguing the weak economy justifies a return to stimulus, he has unveiled a plan to run "modest" deficits of $10 billion or less in each of the next two years, followed by a smaller deficit in 2018 and a balanced budget in 2019. …

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