XPost: can.politics, bc.politics, ab.politics   
   XPost: ont.politics, sk.politics, man.politics   
   From: gregcarrsober@gmail.com   
      
   On 28/04/2014 5:13 PM, {~_~} Раиса wrote:   
   >   
   > financialpost.com | April 28, 2014   
   >   
   >   
   > Ottawa on track to hit surplus ahead of schedule, but penny pinching   
   > will have its costs   
   >   
   >   
   > OTTAWA — After some tough years of spending restraints, Canada’s economy   
   > is soon expected to return to normal levels of growth and possibly get   
   > back to budget surpluses ahead of schedule.   
   >   
   > But climbing out of hefty annual deficits and ensuring the country again   
   > reaches its potential output comes at a cost, according to the federal   
   > budget watchdog.   
   >   
   > In particular, the Conservative government’s fiscal policies — although   
   > often lauded for helping to support Canada’s recovery from the 2008-09   
   > recession — also limited the pace of that growth, as well as job creation.   
   >   
   > In its latest economic and fiscal outlook, the Parliamentary Budget   
   > Office acknowledged Monday that last year’s economic growth of 2% was   
   > 0.4 points higher than its projections. It now expects gross domestic   
   > product to expand by 2.1% in 2014 and 2.7% the year after that, and then   
   > remain above its potential growth rate well into 2018.   
   >   
   > “[But] this solid growth is the result of higher domestic and external   
   > demand, partly offset by government spending restraint acting as a drag   
   > on economic activity and job creation going forward,” said the PBO,   
   > headed by Jean-Denis Frechette.   
   >   
   > “When these measures are combined with the spending, savings and revenue   
   > measures, as well as revisions to spending levels introduced beginning   
   > in Budget 2012, the level of real GDP is projected to be 0.5% lower in   
   > 2016 than would have been the case in the absence of these measures,”   
   > the outlook says.   
   >   
   > “Further, this economic impact translates into about 46,000 fewer jobs   
   > being created by 2016.”   
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   >   
   >   
   > Nevertheless, the PBO says Ottawa appears closer than previously thought   
   > to balancing its budget, thanks to signs of an improving U.S. and global   
   > economies, and ongoing government spending restraints.   
   >   
   > In the government’s Feb. 11 budget — presented by then-finance minister,   
   > Jim Flaherty — the deficit was forecast to shrink to $2.9-billion this   
   > fiscal year —from a final calculation of $16.6-billion in 2013-14 — and   
   > return to a surplus of $6.4-billion by 2015-16, coinciding with a   
   > federal election.   
   >   
   > But the PBO says there is a 50% chance of balancing the budget in   
   > 2014-15. It expects a 2013-14 shortfall of $11.6-billion, followed by a   
   > deficit of just $500-million this fiscal year — within striking distance   
   > of breaking into the black. For 2015-16, the PBO predicts a surplus of   
   > $7.8-billion.   
   >   
   > “A budgetary surplus could be achieved in 2014-15… if revenues rebound   
   > at a higher rate than expected, or if departments underspend at the same   
   > rate as fiscal 2009-10 to 2012-13,” the PBO says.   
   >   
   > Many economists agree that Mr. Flaherty, who died shortly after   
   > resigning in March, had arguably already taken the government’s books   
   > out of a deficit, but was holding off declaring victory until the   
   > declared balanced target of 2015-15.   
   >   
   > “Jim Flaherty didn’t live to see it, but unless economic growth   
   > seriously disappoints, his last budget [in February] delivered the   
   > surplus he was seeking as his political epitaph,” said Avery Shenfeld,   
   > chief economist at CIBC World Markets.   
   >   
   > The quicker pace of deficit reduction was evident last week in a Finance   
   > Department report that showed the most recent tally, for 11 months of   
   > this fiscal year, put the shortfall at just $5.4-billion. However,   
   > economists say the final months of any fiscal year can be volatile due   
   > largely to end-of-year expenses, such as tax refunds.   
   >   
   Good. A budget balanced with corporate taxes cut to stimulate investment   
   and the GST cut to 5% from 7% and the various boutique tax cuts (I am   
   especially fond of the transit pass tax break) we are seeing the results   
   of Flaherty's wise stewardship. Way to go Harper.   
      
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