With the plunge in oil prices over the last six months (and already soft natural gas prices), it’s not headline news to note that provinces heavily dependent on energy-related revenues are suffering.
Ontario’s provincial government wants a balanced budget for the 2017-18 fiscal year, and Finance Minister Charles Sousa is adamant that Ontario will reach that goal.
If you listen to Alberta Finance Minister Doug Horner, the province's public finances are under control. The government's budget imposes no new taxes, spending growth has been moderated, and Alberta is running an operational budget surplus after successive years of budgetary deficits.
On February 18th British Columbians will be watching to see if finance minister Mike de Jongs budget sets out a plan to deliver on his governments ambitious goals with respect to economic growth and job creation. And the truth is, the province needs it. The past year was a disappointing one for BC in terms of economic and employment growth compared to other provinces.
Some people will say this budget is boring, finance minister Jim Flaherty remarked after unveiling Tuesdays federal budget. A careful look, however, suggests the minister might be understating the future significance of his budget.
After running six consecutive deficits totaling $156.5 billion, Flaherty has been clear that balancing the budget in 2015-16 is his top priority. Budget 2014 reaffirms that commitment.
With federal Finance Minister Jim Flaherty poised to unveil his 2014 budget on February 11th, early signs point to a business-as-usual budget with his government staying focused on eliminating the deficit in 2015 and creating the fiscal room to provide tax relief in next years budget conveniently right before the 2015 federal election campaign.
Another year has come and gone and Ontario's weak public finances remain largely unchanged. The provincial government did little to improve its fiscal position in 2013 and recently signalled it intends to continue with debt-financed spending into the New Year. But the status quo isnt serving Ontarians well. For 2014, the government should chart a new course that places provincial finances on a more sound footing. That would be a much-needed New Year's resolution for Canadas largest province.
With the holiday season now behind us, the oncoming flood of credit statements to Canadian households is a powerful reminder that there are no free lunches. Borrowing to pay for current consumption brings interest payments, and ultimately, the need to pay off principal balances. Most Canadians are intimately familiar with this reality when it comes to their household finances. But this same reality also applies to governments. As taxpayers, Canadian families are also responsible for interest on government debt. And these payments are significant.
After federal Finance Minister Jim Flaherty unveiled his latest financial plan Tuesday, much of the media hype centred on the governments larger than expected surplus in 2015-16. Early chatter seemed to accept the government will deliver as promised and some declared its conservative assumptions might allow for the deficit to be eliminated even earlier.
Therell be no doubt that were balanced in 2015, federal Finance Minister Jim Flaherty told reporters after recently meeting with a group of private sector economists. This is among Mr. Flahertys most categorical statements to date on his plan to achieve a balanced budget in 2015-16. But in light of recent economic forecasts and potential threats to the governments revenue projections, he would be well-advised to focus on further spending restraint something he can fully control in order to deliver on his promise.