government spending

“There’ll be no doubt that we’re balanced in 2015,” federal Finance Minister Jim Flaherty told reporters after recently meeting with a group of private sector economists. This is among Mr. Flaherty’s 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 government’s 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.

In a recent drive from Saint John to St. Andrews, New Brunswick, I marvelled at the mostly four-lane highway that connected the two points on the map and how empty it was on a Friday evening on a long weekend.  I compared it with much of the TransCanada highway in British Columbia, four-laned in portions where it should be six, and often only two-laned where it should be four, as well as to the regularly packed four-lane highway between Edmonton and Calgary.

Fiscal policy is really about taxes and spending and the federal government recently provided some hints on its plans in these areas.

In the recent Speech from the Throne, the government reaffirmed its commitment to balancing the budget by 2015-16 and providing "greater tax relief for Canadian families" after the budget is balanced. But what form this tax relief may take remains a mystery.