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OTTAWA–Despite John Manley and Paul Martin’s repeated warnings of a dismal fiscal outlook, the Alternative Federal Budget’s calculations show Canadians can expect an underlying federal surplus of $6.6 billion in fiscal year 2003-04.
The AFB’s Economic and Fiscal Update, released today by the Canadian Centre for Policy Alternatives, predicts that this year’s surplus of $6.6 billion will rise to a surplus of $20.4 in fiscal year 2006-07, constituting a cumulative surplus of $55.9 billion over the next four years.
The government can still spend $10 billion more in fiscal year 2003-04 than it did in 2002-03 to address the past year’s string of natural and economic disasters, all without jeopardizing the $6.6 billion surplus.
The Department of Finance’s policy of consistently and deliberately underestimating the size of budget surpluses has resulted in a grossly inaccurate depiction of the nation’s finances. Conversely, the AFB’s calculations have proven to be much more accurate in predicting the size of the annual budget surplus and the amount of money that could be reinvested in social programs such as health, education, and infrastructure.
In addition to the federal government’s practice of low-balling budget surplus estimates, Ottawa failed to live up to its spending commitments in 2002-03–$5.2 billion short–in spite of promising to increase program spending to 12.2% of GDP from its average of 11.5% since 1997.
According to CCPA Senior Economist Ellen Russell, “After six years in a row of posting surpluses much larger than it ‘expected,’ the federal government’s credibility in claiming that the cookie jar is once again empty has been stretched to the breaking point.”
“This year Canadians have endured SARS, forest fires, hurricanes, BSE, and West Nile. For the federal government to claim that it can’t afford to respond to these demands when in fact its coffers are full, is not an act of fiscal prudence – it is an act of democratic irresponsibility,” concluded Russell.
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