It’s a troubling economic sign when a Conservative government is having difficulty staying conservative — no matter how hard it tries.
With financial woes gripping much of the world, the Tories are finding just how difficult it is to keep the federal budget in check. Indeed, just last week, Finance Minister Jim Flaherty changed projections for paying off Canada’s $31-billion deficit to 2015-16, a year later than the Conservatives had hoped to have it off the books.
And if that change of plans wasn’t enough of a kick in the pants for the Tories, things won’t get any better for Stephen Harper’s majority government. A report from the parliamentary budget officer this week shows that despite some effective cost-cutting measures, federal spending is still 15 per cent higher that it was before launching its stimulus program in 2009.
And with an aging population and increasing debt, cutting costs will only get more difficult. We got a peek into the future this week when the budget officer’s report highlighted a $1.6-billion increase to health-care allocations over the same time last year. Ouch.
Another age-related expenditure, old-age security payments, also rose $1.1 billion from last year. Another ouch.
The pain will only get more intense as baby boomers reach the age to qualify for old-age security. According to one expert, their numbers are set to soar. Add to this the servicing charges on public debt jumping to $1.4 billion, and the Conservatives will find it nearly impossible to prevent this snowball from rolling downhill.
Even hundreds of millions of dollars worth of cuts to the Defence Department over this past year are hardly putting a dent in the situation.
So, what’s a government to do? With Canada’s banks being lauded worldwide, things seem to be in relative order, but should we be satisfied with, as one economist described the U.S. not so long ago, being the healthiest horse in the glue factory?
The answer, hopefully, is no. Not only are our banks in decent shape, but also Canada has something in abundance that many other struggling countries have very little of: natural resources.
With talk of increased trade with Asia, exports of oil and other energy products will undoubtedly add to federal coffers, offering the best chance for Canada to dig out of its hole. Asian markets are key, and Harper has already tipped his hand that Ottawa is headed in that direction.
The faster, the better.
We Say editorials represent the viewpoint of The Daily News and are written by publisher Tim Shoults, city editor Tracy Gilchrist, or associate news editors Dan Spark and Mark Rogers.