program spending

For those who don’t normally read budget documents, here’s what the Alberta government just did in its 2013 budget: they abandoned the sensible budget and financial framework that former Progressive Conservative Finance Minister Jim Dinning introduced in 1993.

When governments enter an election year, the political temptation to play fast and loose with budget numbers is strong. The most famous example of this was probably the 1996 budget in British Columbia. That year, then-B.C. Premier Glen Clark’s office injected sunshine into revenue forecasts, this in order to trumpet a balanced budget on the campaign trail. His office did so over the objections of Finance Ministry officials. Post-election, once that became known, the “fudge-it” budget scandal permanently tarred the NDP government.

Ever since the last recession, Canadians have been informed by pundits and the political class that stimulus spending—perhaps better labelled as “binge” spending—was critical to Canada’s economic recovery.

But extra government spending had little to do with Canada’s exit out of the recession. The recession ended in mid-2009; it was only about then that federal and provincial governments started spending extra (borrowed) stimulus cash.

On Tuesday, Ontario Finance Minister Dwight Duncan had one of those rare opportunities of which politicians can only dream. With his province heading toward a fiscal crisis caused by mounting debt and out-of-control spending, an opposition sympathetic to dealing with the problem, a public that clearly wants his government to address the debt, and news outlets that understand the need for significant fiscal restraint, everything lined up for Duncan.