OTTAWA—A Conservative party buffeted by weeks of bad news on the election trail as it seeks a new mandate welcomed word today that the federal government posted a $1.9-billion surplus last year.
Prime Minister Stephen Harper issued a news release touting the final tally for the 2014-15 fiscal year as evidence of his government’s “careful economic stewardship.”
The timing of the announcement from Finance Canada couldn’t be better for Harper, with the Conservative, NDP, and Liberal leaders set to face off later this week in an election debate on the economy in Calgary.
“The protection of our economy is our No. 1 priority,” Harper, who is campaigning in British Columbia, said in his statement.
“Amid increasing instability in the global economy, our Conservative government’s economic action plan is working—delivering new jobs and economic growth through lower taxes and a balanced budget,” he added.
As recently as its April budget, the Conservative government still was pencilling in a $2-billion deficit for last year, with federal ledgers predicted to be back in the black for this 2015-16 fiscal year.
Economists say the marginal deficit forecast for 2014-15, and the marginal surplus that eventually emerged today, are immaterial from a fiscal standpoint.
But the numbers have taken on exaggerated political symbolism in the run-up to the Oct. 19 federal election.
Timing the deficit elimination to coincide with this October’s fixed election date always was a political rather than economic imperative.
And Harper’s news release noted the return to surplus, following six-consecutive deficits in the wake of the 2008-09 global recessions, comes “one full year ahead of schedule.”
The surplus figures also shone a spotlight on Liberal leader Justin Trudeau’s pledge to run deficits of up to $10 billion annually for the first three years of a Liberal mandate.
Both Harper and NDP leader Tom Mulcair have attacked the Liberal plan, and Mulcair again characterized it as a “reckless promise” and evidence of “short-term thinking” at a campaign stop today in Vancouver.
“Today’s numbers are good news for Canadians and it shows that the NDP’s going to be starting off on the right foot,” said Mulcair, who has committed to a balanced budget in his first full year in office.
Trudeau, for his part, isn’t buying Conservative claims that the country’s economy has turned the corner.
Harper has claimed that a $5-billion surplus in government accounts through the first three months of 2015-16 is proof this year will end in the black.
However, Finance officials continually caution that monthly tallies in the “fiscal monitor” are not predictive of the year-end accounting.
Others, such as the parliamentary budget officer, have warned that low oil prices point to a marginal government deficit this year.
“We are in deficit right now,” Trudeau asserted today at a campaign event in Toronto.
“Mr. Harper has put us in deficit this year,” he charged.
“As for last year’s numbers, we know and we saw Mr. Harper underspending and making cuts to Veterans Affairs, to Aboriginal Affairs, to seniors in the billions of dollars so that he could balance the books in time for his election.”
Trudeau maintained his proposed deficits will fund a massive infrastructure build that will better position the economy for the future.