The debt, deficit and federal spending

AT ISSUE: The economy

Canada’s economy is on the right track but an election may threaten growth, if you believe the federal Conservatives.

“Only Stephen Harper can deliver the stable national government that Canada needs to complete the economic recovery,” read the announcement on Day 1 of the election campaign.

In the government’s 2011 budget, rejected by all opposition parties, Harper put forward a low-tax plan for jobs and growth, that he promises will transform the country’s deficit into a surplus by the 2015-16 fiscal year.

With two months still left to report, the budget deficit so far this fiscal year is $27 billion. Coincidentally, Canadians have paid nearly as much in interest payments on the country’s $559-billion debt, during the same 10-month timeframe,

Debt is a key factor in a strong economy, according to economist Christine Brown in Camosun College’s faculty of business.

“The more money we have to spend on the interest payments … the less money we have to spend on Canadians,” she said. “I don’t think Canadians realize how key it is,”

So are the Conservatives the party to fix the problem?

Not according to the budget they put forward, Brown said.

“This last budget was actually … it was sort of insipid.”

Brown said the Conservatives will not address the deficit until after the election.

“They knew there was a possibility of an election being called and for that reason, it was very difficult for them to come up with any of the strong fiscal restraints (necessary for balancing the books).”

The University of Victoria’s James Lawson also questions the Conservatives’ position on the deficit.

A cynical reading of a strong Conservative economic position “could say that slaying the deficit is not entirely the medium-term goal,” said Lawson, a political science professor.

“Even if it hurts the deficit in the medium term, you cut taxes in order to expand the economy and the bigger tax base pays you back in the long run,” he said of the theory.

“Then you turn around and say, ‘the government is living beyond its means,’ and this becomes an opportunity to bring in the other side of economic Conservative thinking, which is shrinking the size of the state.”

The problem is there’s not good evidence to suggest tax cuts help to rebound the economy, he said.

On this point Brown disagrees – but both academics agree on a number of other points.

Both credit the Liberal party’s track record at reigning in deficits.

They also point to investment in education as critical to growing a strong knowledge-based economy.

“I believe that affordable education is the key to our future productivity, especially in B.C.,” said Brown.

Other economic policies that could benefit the local economy include a national social housing program, added Lawson.

“This region is really prospering by the boom in real estate for retirees,” he said. “That can really squeeze out people at the lower end of the income bracket.”

Federal investment would stimulate the construction trades and “make it easier for a key part of the local economy … to stay in the region.”

Sasha Angus, economic development officer with the Greater Victoria Development Agency, also weighed in.

Though non-partisan, he praised the Conservative’s proposal to legislate a permanent annual investment of $2 billion in the gas tax fund to provide predictable, long-term infrastructure funding for municipalities.

The move would allow municipalities to invest in capital over the next five to 10 years, he said.

rholmen@vicnews.com

 

Candidates Weigh-In

What would you do to build a strong economy? We asked candidates aiming to represent Victoria in the House of Commons.

“I’ll be the best salesman Victoria has sent to Ottawa since … Sir John A. MacDonald,” said Conservative candidate Patrick Hunt.

“I’ll focus on creating jobs, especially in the area of employee training, where Victoria has a natural, untapped advantage,” he said. “I’ll actively market Victoria to corporate Canada and HRDC as an ideal centre for world-class leadership, management, accounting and sales training.”

Christopher Causton, representing the Liberals, said his party proposes “affordable tax rates, spending discipline, programs to boost youth employment and investments in education.”

Causton also took aim at the Conservative government, which he says, turned a $13-billion Liberal surplus into a $56-billion deficit.

“Their fiscally irresponsible policies are aimed at plunging Canada substantially deeper into a deficit for fighter jets, U.S.-style mega prisons and corporate tax cuts.”

NDP incumbent Denise Savoie added “the Conservatives’ HST debacle” to the list of alleged misspending. They’re examples of a “tax and spend” approach sometimes misattributed to the NDP, she argued. “The NDP prefers ‘tax fair and spend smart.’”

“Tax fair means making wealthy individuals and corporations pay their share,” she said. “Spend smart means investing in the green economy, an educated workforce, public transit … and preventive approaches to health care.”

Green candidate Jared Giesbrecht shares the “smart” lingo. A strong economy is a smart economy, which entails balanced budgets and clear incentives for job creators, he said.

“We can reward hard work and waste reduction with meaningful tax breaks for citizens, and bring an end to corporate welfare, a tax on carbon pollution, and stable funding for municipalities.”

 

 

Just Posted

Proposed design for the Topaz Park bike and skate park elements. (Courtesy City of Victoria)
Victoria requesting feedback on Topaz Park redesign

Public input now being taken for proposed skate, bike park ideas

Improving safety at Keating Cross Road and the Pat Bay Highway is the goal of the flyover project currently in the works. The province aims to reveal the final cost and design this fall. (Screencap/Ministry of Transportation and Infrastructure)
Final budget, design of Keating flyover in Central Saanich still in the works

Ministry of Transportation and Infrastructure says information coming by this fall

Colin Davidson won $100K on a Set for Life scratch ticket in Sooke. (BCLC photo)
Sooke man does ‘happy dance’ after scratching a $100,000 Set for Life win

Colin Davidson plans to renovate his home and invest in his daughter’s education

West Shore RCMP K9 Halla. (Black Press Media file photo)
Sound of RCMP dog enough to stop suspects in Oak Bay

West Shore RCMP K9 unit called in, didn’t get to chase

Saanich Neighbourhood Place is hoping to open the doors to its new centre in July, pending final council approval. (Black Press Media file photo)
Saanich childcare agency awaits final approval on much-needed new facility

Saanich Neighbourhood Place keen to open new centre this summer, expand options for community

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

There is an emergency shelter near the Golden Ears peaks. (Facebook/Special to The News)
Hiker fogged in on Golden Ears, spends 2 nights

Talon Helicopters, Ridge Meadows Search and Rescue bring him home Monday

Annamie Paul, leader of the Green Party of Canada, speaks at a news conference on Parliament Hill in Ottawa, on June 10, 2021. THE CANADIAN PRESS/Justin Tang
Green Leader Annamie Paul facing no-confidence motion from party brass

move follows months of internal strife and the defection of MP Jenica Atwin to the Liberals

Tulips bloom in front of the Supreme Court of Canada in Ottawa, Thursday, May 10, 2018. Day two of a full week of scheduled hearings will be heard in Federal Court today on a case involving Indigenous children unnecessarily taken into foster care by what all parties call Canada’s “broken child welfare system.” THE CANADIAN PRESS/Sean Kilpatrick
AFN slams Ottawa for ‘heartless’ legal challenge of First Nations child compensation

2019 decision awarded $40,000 to each Indigenous child removed before 2006

Rick Ruppenthal of Saltair will host a 12-hour talk-a-thon Friday, June 18 over Facebook live. (Photo submitted)
Talk-a-thon to focus on men’s mental health issues

Island man spearheading a campaign to generate more conversation during fundraiser

Ivy was thrown out of a moving vehicle in Kelowna. Her tail was severely injured and will be amputated. (BC SPCA)
Kitten thrown from moving vehicle, needs help: Kelowna SPCA

The seven-week-old kitten had severe tail and femur injuries

The Canadian Anti-Fraud Centre estimates that less than five per cent of mass-marketing fraud is ever reported.
Tips to avoid scams targeting Vancouver Island seniors

In most cases, fraudsters impersonate an individual, business or agency seniors recognize and trust

Vancouver courthouse. (Photo: Tom Zytaruk)
Man loses bid to appeal conviction for 1999 rape at Abbotsford music festival

James Redden, 53, formerly of Nanaimo, was found guilty in 2019 following six-day trial

A health-care worker holds up a sign signalling she needs more COVID-19 vaccines at the ‘hockey hub’ mass vaccination facility at the CAA Centre during the COVID-19 pandemic in Brampton, Ont., on Friday, June 4, 2021. This NHL-sized hockey rink is one of CanadaÕs largest vaccination centres. THE CANADIAN PRESS/Nathan Denette
‘Vaxxed to the max’: Feds launch Ask an Expert campaign to encourage COVID shots

Survey shows that confidence in vaccines has risen this spring

Most Read