Federal Finance Minister Jim Flaherty brought down his government’s budget last Tuesday, the highlight of which (from his viewpoint) was a projected $6.4 billion dollar surplus, not this year, but in 2015 which is coincidentally, the year of the next federal General Election.
During the press conference following the budget presentation, a reporter asked the simple question, ‘why didn’t you just bring in a balanced budget this year, rather than planning for a substantial surplus in 2015?’
Mr. Flaherty admitted that he could have balanced his 2014 budget, but was dismissive of the question (the exchange was shown on the CBC television news report that same day) and admitted that, yes, he could have balanced this year’s budget with a paltry $100,000 surplus, based on a $170 billion federal budget, implying ‘what’s the point?’
Indeed, what is exactly the point of racking up a whopping $6.4 billion surplus next year, unless it’s to be a shiny object planned to impress the voters during an election year?
Why does a government need to aim at a surplus of this size anyway?
Practical wisdom would indicate that the alignment of a large federal budget surplus and an election might herald a tax cut for the next year or two and that governments are in the position to maneuver events and circumstances to their own benefit.
That is the game they play, of whatever stripe. Indeed, the Liberals, characterized as “tax and spend” bullies by the Conservatives when Prime Minister Chrietien formed three back-to-back majority governments following as many elections when then-finance minister Paul Martin brought in surplus budgets and also froze taxes for a while in the first decade of this century.
But are there more pressing uses for this money rather than letting it pile up as budget surpluses?
Last week in this space, the same Conservative government received kudos for its new approach to funding First Nations education, but with the observation that it is unfortunate that the political hand must also play a part as these new programs won’t be available to begin until 2016, the year following the next election.
New infrastructure funds, announced late last week, will certainly also fall afoul of this piece of government manipulation and, considering the issues the City of Toronto has with, for example, its deteriorating Gardiner Expressway, assistance is needed now, not in two years time.
Any government should not be in the profit making business, especially for its own ends as an election looms. Although we may have gotten used to the concept, we should not be bribed with our own money by the government, any government, of the day.