Nov. 15, 2019

Election just over, outlook gets worse – hope no one is surprised

So says our intrepid Parliamentary Budget Officer.

We waltzed through an election with hardly a peep on the fiscal situation, our growing debt and hence continuing deficits. If one raised such boring things, “the silence” ensued. 

You see we seem to have, it’s now world wide really, this idea that, as our Prime Minister said during his first election campaign, the deficit, debt, etc. will look after itself. 

And it has alright. 

And isn’t it ironic ? We have, in the last few days, the socialist party, the NDP, meeting with the minority Liberals to demand more and more spending, like a Pharmacare program costing billions of extra money, in return for their support.

No one can utter the words anymore: “We can’t afford it!” There is almost a grin on the faces of people if you say such things. 

Well, here is the PMO saying: “PBO has downgraded its outlook for growth in the Canadian economy in the second half of 2019 reflecting, in part, increased trade tension and related uncertainty. Real GDP growth is projected to be 1.7 per cent in 2020 and 1.6 per cent in 2021. This is, respectively, 0.3 percentage points and 0.2 percentage points lower than we projected in our June 2019 election proposal costing (EPC) baseline. The downward revision stems from weaker export performance, reduced contributions from inventory investment and lower provincial government spending in Alberta.”

And the PMO even mentions lower government spending in Alberta. But if you listen to Easterners, Alberta is overplaying its importance. Not so says PMO. 

But this is because of what was said one sentence earlier when the office talked about lower export performance, and inventory investment!

Why? Can’t get that oil to market! Why? Too few pipelines! 

Why? federal government won’t take on Quebec (too many seats) to get Energy Easy going so eastern Canadians can taste that Alberta oil, gotta taste that American and Saudi, North Sea, Nigerian stuff. And can’t get to west coast, because B.C. obstructs, and because of : Bills 48, Bill 69 : Stopping tanker traffic on wet coast and building extra walls of regulation for new projects. 

 All is coming home to roost.

Oh! And after going through a great song and dance about numbers and all of it on a base of the status quo, the Budget Officer at the end says: “This does not take into account the promises of the recent election (ha ha ha, can’t you just roll over in laughter or disgust?)

He says: “However, based on commitments made during the electoral campaign, it is expected that budgetary deficits over the medium term will be higher than our status quo projection, reducing the probability of balancing the budget by 2024-25, as well as reducing the probability that the debt-to-GDP ratio will be lower than 30.9 per cent in that year.”

Would you like to know how much our debt will increase by 2024/2025? A cool $102 Billion according to the PMO. 

So, Alberta counts a lot, folks, and with present trends of spending and policy decisions already in place, fait accompli, do you want to bet on our financial picture getting better any time soon?