TD questions Ottawa's surplus forecast
The federal government will miss its projected return to surplus by a whopping margin, economists at Toronto-Dominion Bank wrote Tuesday.
OTTAWA -- The federal government will run a cumulative deficit of roughly $162-billion over five years, or nearly double what Ottawa projected in its most recent budget, economists at Toronto-Dominion Bank said Tuesday. As a result, the government will be nowhere near a return to surplus in 2013-14, as Finance Minister Jim Flaherty said in his January budget. According to the TD forecast, Ottawa will record a $19-billion deficit that fiscal year, as opposed to an anticipated $700-million surplus. The only way the budget gets back to balance in 2013-14 is if Ottawa freezes program spending growth after fiscal 2012-13, at which time TD expects the economy to fully rebound from the current downturn.
Deficits are to continue up to 2013-14, with a $19.4-billion shortfall, which is expected to amount to 1.1% of nominal GDP. That means $162-billion of deficits for a five-year period ending March 31, 2014, compared to the $83-billion anticipated during the same timeframe in the budget.
What's another 80 billion, especially when you won't own up to it, until FORCED by the calendar.
These type of numbers, and TD argues this fact, mean the government either has to map out a massive cost cutting exercise and/or raise the spectre of TAX INCREASES. I would argue that the party that comes to grip with simple realities and formulates mature policies, will be best placed come the next election. These are sobering numbers, and one can't expect to be seen as credible if people hold onto unrealistic recovery scenarios.