Surplus: Canadians born after 2008 may be unfamiliar with the term. It is essentially an inverse debt, an anti-shortage. A surplus in the treasury means that there is more coming in than there is going out. It sounds crazy, but it isn’t a Dr. Seuss concept. In fact, the term predates Dr. Seuss and has been used in Canadian parliaments since the 19th century. Recently, after a six-year hiatus (five years if you count Jim Flaherty rambling about a surplus well after everyone else had given up on it), Canada’s federal government has decided to revive the term. The government says 2015 will be a surplus year, but won’t say what that means for Canadians.
The CBC reports that the return to surplus finances means the Conservative government will start fulfilling their 2011 election promises. A four-year delay on a four-and-a-half-year term sounds fair.
The good news is that the prizes are well worth the wait. Treasury Board President and extravagant gazebo builder Tony Clement says he is ready “to get more money in the jeans of the average taxpayer.” Lousy sound bite, Tony. It sounds like you want to put your hand in our pants. Moving on…set your mouths to salivate over the reason you’ll soon be able to feel Mr. Clement’s icy hand slipping a plastic Wilfred Laurier down your thigh. Thanks to the surplus, you’ll enjoy an adult fitness tax credit and greater limits on tax-free savings account deposits. That’s right, you’ll get a break on your taxes for promising to lose weight. Feels like heaven.
This isn’t the whole story. On CBC Radio, high school heavyweight Evan Solomon grilled (read “sautéed”) Clement over how he would spend the rest of the surplus. Clement said that the government would take a “balanced approach” to “allocate money to important projects that help stimulate job growth and economic growth.” It was a delicious non-answer, sautéed to perfection, just the way Evan likes it. It is up to us to decide what it meant.
Let us revisit the basics. Canada now has a surplus. It is theoretically possible but practically unimaginable that the government will dedicate the entire surplus to funding tax cuts because (a) there are only so many taxes to cut, (b) tax cuts reduce government revenues, and thus eliminate the surplus, and (c) the last time the government legislated major tax cuts in a surplus situation, Canadians saved a few hundred dollars and Jim Flaherty ushered in the biggest deficit in Canadian history. Logically, Clement’s “balanced approach” must be suitably balanced. It might even feature some wiggle room for a few of those “important projects” he mentioned.
A few weeks ago, Canada went to war in the Middle East. The mission is supposed to last 6 months. That’s what Parliament approved, so that’s what will happen—just like when Parliament authorized military action in Libya. Yet the extended Libya mission cost almost 600% more than then Defence Minister Peter MacKay said it would. Surely that was an anomaly; wars don’t run overtime and above cost. Fighting a war isn’t like hosting the Olympic games. Right?
Considering broken promises and bad estimates, there’s reason to believe that it is. Less than a month since Parliament approved military action, Tom Lawson, Canada’s Chief of Defence, says it’s “not likely” that Canada will successfully complete the current mission in under 6 months. On the possibility that the mission could continue beyond six months, Lawson said, “we’ll see.” Lawson could be more decisive.
It’s quite possible that “we’ll see” the same government that sent us to war approve an extension for the mission. In that case, it’s highly probable that Canada will kiss a decent chunk of its surplus goodbye. War is an employer. War stimulates the economy. As such, war is what Tony Clement would call an “important project.” It might already be eating up our surplus.
So, Canada, rejoice in the surplus’ glow! Prepare to buy a gym membership you’ll never use except as a tax break. Prepare to invest that tax break in your tax-free savings account. Prepare for a long, expensive, painful war. These are things for which you can be ready. You need only fear the surprises. There is no way you can be ready for Tony Clement’s hands in your pants. Decide for yourselves if it is a necessary evil.