One of many unsettling things about Pierre Poilievre is that he doesn’t like nosy reporters. He made that clear a year ago when he refused to take questions at his first news conference after winning the Conservative party leadership. And he continued in that direction following his triumphal performance at the PPC (Pierre Poilievre Conservative) policy convention in Quebec City over the weekend.
Poilievre didn’t want to talk to journalists about some of the party’s more unsettling forays into social conservatism, and even avoided the opportunity to put more meat on the bones of his rhetoric about housing, taxes or – as he would have it – fixing a broken country. Instead Canadians looking for enlightenment were fed a steady stream of surrogates and spinners.
For example, Jenni Byrne, organizer par excellence and Poilievre’s one-time girlfriend had a wide-ranging Saturday morning radio chat with Catherine Cullen of the CBC – that’s the CBC Poilievre has vowed to defund. Andrew Scheer, one of Poilievre’s predecessors, went on CTV’s Question Period to obfuscate about someday balancing the federal budget to bring down interest rates. And in the lead-up to the weekend spectacle I caught the out-going party president Rob Batherson on the endangered CBC’s Power and Politics.
An affable party loyalist with a red tory pedigree, Batherson assured viewers that although the party expected the “usual fear and scare tactics” from its opponents in the run-up to the next election, he expected Canadians would “see through those tactics and they’ll focus on the fact that everything has gotten appreciably worse over the last eight years.” (My italics)
“Appreciably worse” is a milder variation on the “everything is broken” refrain, but coming from Rob Batherson instead of Poilievre (aptly described recently by cabinet minister Marc Miller as a serial bullshitter) let’s allow that Batherson honestly believes that to be the case. It would also be fair to grant him some rhetorical leeway on “everything.” Even in the worst case scenario you could presumably find something that hasn’t “gotten appreciably worse.”
“Appreciably worse” certainly would apply to some big items – climate change, housing affordability, access to health care and, recently, inflation. And there are other important “things” – for instance defence, reconciliation, the economy, infrastructure – where the jury’s still out. But there are other areas where things are definitely not worse – day care, kids’ dental care and child poverty for example.
I’ll be writing more about the “last eight years” under the Liberals later on, but I want to start with the balanced budget, something talked about by Scheer and promised by Poilievre in response to what he calls the “costly coalition” – i.e. the Liberals supported by the NDP on budget or confidence votes.
In light of the large pandemic-related deficit incurred in 2020-21, combined with a number of new spending initiatives in subsequent budgets, the fiscally prudent voter may find “costly coalition” an appropriate epithet. But that voter may be shocked to learn that over the last eight years government finances in Canada have improved “appreciably”. Moreover, based on current policies, the financial picture for governments is projected to be even better in the years ahead.
This analysis comes from the Parliamentary Budget Office (PBO). The independent agency was recently much quoted by the opposition and the media when its analysis of the carbon tax complicated the Liberal claim that for 80 per cent of Canadians rebates would more than offset the tax. But when the PBO’s annual Fiscal Sustainability Report (FSR) presented data that undermines their scare-mongering on debt and deficit the opposition and the media ignored it.
The PBO measures the overall fiscal health of Canadian governments by combining federal, provincial and municipal debt and the assets of the Canada and Quebec pension plans. Calculations published with the 2023 FSR show that in 2015 general government debt relative to GDP was 40.6 per cent. In 2022 it was only 27.0, down by a third over the eight-year period. Put another way, that’s a 33 per cent improvement in Canada’s overall finances since 2015. Who’d have thunk it?
The data goes back only to 2008, when general government debt stood at 40.2 per cent. That means that for seven years under the Harper Conservatives there was a slight increase to 40.6 per cent. And digging a bit deeper reveals that under that government federal debt-to-GDP remained relatively flat at the expense of the provinces and municipalities who saw their debt levels rise significantly.
General government debt-to-GDP selected years
Source: PBO and Statistics Canada
Inclusion of pension plan assets in measuring government debt is unusual in Canadian public accounting, although it is consistent with the metric used by the International Monetary Fund. As the table shows, excluding pension assets from the calculation raises the combined government debt in 2022 from 27 per cent to 50.5 per cent. However, doing the same for 2015 raises the combined debt that year to 57.7 per cent. So even with pension assets left out of the calculation, government debt in 2022 was still appreciably lower – i.e. not worse – than it was in 2015.
As for the future, the PBO report provides absolutely no rationale for cutting spending in quest of a balanced budget.
“From the perspective of the total general government sector, that is federal and subnational governments and public pension plans combined, current fiscal policy in Canada is sustainable over the long term. Relative to the size of the Canadian economy, total general government net debt is projected to decline steadily over the long term due to fiscal room at the federal level and to rising net asset positions in the public pension plans.”
In fact, the the PBO calculates that the federal government can maintain its current debt level while increasing spending and/or reducing taxes by nearly $50 billion a year.
“Current fiscal policy at the federal level is sustainable over the long term. To stabilize its net debt at 30.5 per cent of GDP over the long term, we estimate that the federal government could permanently increase spending or reduce taxes by 1.7 per cent of GDP ($49.5 billion in current dollars, growing in line with GDP thereafter).”
There are many reasons to criticize the Trudeau Liberals’ spending decisions over the last eight years. Too little in some areas – housing and health transfers for example – and too much in some others, such as pipelines and CEWS, the corporate wage subsidy. But when Poilievre declares, as he did in his big convention speech, that he wants to balance the budget “to protect future funding of schools, hospitals and roads” he’s just living down to the rude label pinned on him by Marc Miller. As for Rob Batherson, he may want to stay tuned for more examples of things that haven’t gotten worse over the last eight years.