In advance of tabling their first budget, the Liberals conveyed a message that deteriorating government finances were the result of a weak economy. The reality of the budget is quite different from the rhetoric; the source of the large and sustained deficits is a marked increase in spending.
Before analyzing the numbers, we should pause and note how much the Liberals have diverged from their election promise to run deficits of no more than $10 billion with a return to budget balance before the end of their mandate.
At $29.4 billion, the projected budget deficit in 2016/17 alone is larger than the cumulative budget deficits projected for the entire mandate in the Liberals’ platform. And the deficit is not a one-off; the government is planning deficits as far as the eye can see. In total, the string of deficits is expected to add $113.2 billion to the federal debt in just five years —approximately four times as much debt as the Liberals said that they would add.
Both in the lead up to the budget and in the budget document itself, the Liberals tried to establish that a weak economy is the reason why they couldn’t keep their election promises of “modest” and temporary deficits. The data don’t support this. The big deficits are driven by spending...