A Deceptive Way Of Balancing The Budget

By Rupert Johnson

Any government budget should not only state its intent to collect revenue, but also outline the way in which it intends to spend this revenue. It is obvious that when expenditure exceeds revenue this is referred to as a budget deficit. But when revenue is more than expenditure this is called a budget surplus. It, therefore, follows that when revenue is equal to expenditure we get a balanced budget.

This brings me to the matter of the current federal budget tabled in the House of Commons, Ottawa, on Tuesday, April 21, 2015. Joe Oliver, the Finance Minister, bragged that after seven years of consecutive deficits his government has finally presented a balanced budget. But one has to ask: Is this a fact? Or is this an outright deception? If a balanced budget means that revenue is equal to expenditure, then Joe Oliver’s figures are inaccurate and misleading.

When the Finance Minister has to sell government shares in General Motors, and then dip into the country’s contingency fund to make up the short fall of revenue, that is not a credible way of referring to a balanced budget.

The two billion dollars taken from the contingency fund is indeed reckless and irresponsible. This leaves Canada extremely vulnerable if there is an emergency such as massive flooding or other environmental disasters. Where would we get the money if the country is faced with one disaster after another? It doesn’t take a rocket scientist to figure out that higher taxes or borrowing are the only realistic alternatives.

To make matters worse, the Finance Minister’s Income Splitting and doubling of the Tax Free Savings Account are very disturbing and problematic. It should be understood that over the years these two initiatives would amount to billions in lost revenue. But the Finance Minister is totally indifferent and cavalier to this probability.  He said without any hesitation: “Leave that to Prime Minister, Stephen Harper’s grand-daughter to solve.”

There is also no doubt that the Income Splitting and the doubling of the Tax Free Savings Account initiatives only benefit the top 15% of wealthy Canadians. There is nothing in the budget for 85% of Canada’s middle and lower classes.

The doubling of the TFSA in particular is indeed outrageous and misleading. The propagandized claim that seniors will benefit from this move has no basis in fact. As a matter of fact the majority of seniors cannot afford to save $10,000.00 per year. This proposed increase in the TFSA is a bonanza for the wealthy. It would have been better for the government to increase the Old Age Security (OAS) or make it tax free. These changes would probably benefit about 90% of seniors who can hardly make ends meet.

Let’s call a spade a spade. This so-called budget is no more than a political document designed to win the up-coming election in a very deceptive way. There is no doubt that Canadians will not enjoy the so-called benefits for many years down the road. In other words the current administration is saying: If you don’t vote for us you will not enjoy the benefits at all.

Canadians should let Stephen Harper know that this is tantamount to political blackmail. They should, therefore, send a strong message of disapproval to the Prime Minister and vote his party out of office.

Rupert Johnson can be reached at: r.b.johnson@sympatico.ca.