Are the Liberals 'finding their footing' on fiscal transparency?
Canada's former parliamentary budget officer says the Liberal government's first budget includes billions in new spending with no plan to tame the mounting deficits, which could result in austerity measures and tax increases to get the books back to black.
"Through the mid-80s and 90s we ran these deficits year after year after year that were structural in nature," Kevin Page said in an interview with Chris Hall on CBC Radio's The House.
"We got to a point in the mid 1990s where we had debt-to-GDP ratios that got very high — the rest of the world was concerned — and we had to go into a major austerity exercise. I think [Finance Minister Bill Morneau] would rather avoid that scenario. That's a scenario that we saw play out in southern Europe."
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Page cautioned that government "can't keep piling on additional spending and think this is sustainable... We will probably need to raise taxes at some point in time."
Lack of budget transparency
The current parliamentary budget officer, Jean-Denis Fréchette, started raising red flags immediately after the budget was released last month. The budget both omitted data key to assessing the government's long-term projections, and included low economic growth targets.
Page applauded Finance Canada's move to release financial projections — a move that came after some agitation from the current PBO — but he said the exclusion of the underlying data for the final years of the budget is troubling.
"When you don't see the details, usually somebody is trying to hide something. There is a reason for the lack of transparency," he said. "We were looking for a plan that would have fiscal targets, you know, some plans that there would be tradeoffs if deficits get too large, and some analysis around the sustainability of this plan, and we didn't see any of that."
Page cautioned that the PBO, as well as MPs, need to be able to see the government's figures to debate their plans and challenge them publicly.
He said this is a basic tenant of the Canadian federal system, since, "it is the House of Commons' job to hold the government to account. The power of the purse rests with parliament, not the executive."
Page fought with the Conservative government throughout his time in the position from 2008-2013. In 2012, he took the government to court over its refusal to release key budgetary information.
