Failure was never an option when it came to the budget. If the government couldn’t balance it before the election in 2015, then they couldn’t justify handing out goodies to make everyone forget their actions (or inactions) over the last four years. Everything initially looked like it would go according to plan before the wheels fell off. Canada’s deficit is growing again.
After reigning in government spending (by spinning around blindfolded waving an axe), former Finance Minister Jim Flaherty promised that Canada would run a surplus in 2015. Average Canadians rejoiced. After years of cuts to Canadian programs and services, the government would finally be able to balance revenues and expenditures. Rich people could get the tax cuts they’d been promised. Years later, excess wealth would trickle down the walls of middle class jail cells so average folks could lap it up. But surplus/deficit talk is just talk for most people.
Unfortunately, the government wasted no time in announcing plans to kill the newborn surplus, which was exactly what the Parliamentary Budget Officer said not to do. Tax cuts for all (the rich) would mean surplus for none. It was simple math—the sort with which only seasoned politicians could struggle.
Struggle they did. By doubling the Children’s Fitness Tax Credit and creating the Family Tax Credit, they cut the revenues needed to keep their promise of that balanced budget. The monthly deficit is now higher than it was this time last year. There are benefits though! People who can afford to pay $1,000 for a child to play sports receive a small tax break, while their fiscally responsible government continues to borrow to cover expenditures.
If it was all over, it would be a fairytale ending, but it isn’t. The price of oil just tanked, and with it went another source of government revenue. Oil companies don’t pay much tax, but there are enough of them operating in this country that we still make a significant amount of money off them.
What now? The Department of Finance says the government is still on track to balance the budget in 2015. There’s no doubting that possibility. Still, we have to wonder what the government will now cut to make up for the trigger-happy tax cuts. I would like to start and conclude 2015 with all my limbs, and I expect I am not alone.