One of the best things about the federal election campaign so far has been the parliamentary budget officer and his independent costing of election promises.
A rigorous accounting of the onslaught of political promises during an election campaign allows voters to understand not simply their benefits, but also their costs.
That’s why Yves Giroux has hired a pack of number crunchers who prepared for months in advance of the campaign and are now able to produce reliable, public details on how much each new policy commitment costs – in real time.
The exercise has removed a degree of cynicism from the day-to-day announcements dribbled out by the leaders, since the PBO’s estimates automatically have more credibility than the parties’ war rooms.
But are we having the discussion we need about how much Ottawa taxes and spends? While we learn more about how much these promises will cost, we still know far too little about how they will actually be paid for.
What the PBO doesn’t do – nor could he, because his mandate doesn’t extend that far – is assess the overall fiscal integrity of each platform.
Do the numbers for each party’s initiatives add up to something that Canada can actually afford?
Plus, while the Conservatives and the New Democrats have released the PBO cost assessments in tandem with their campaign promises, the Liberals have not.
A full costing won’t be public until the Liberals release their platform at some point, and it’s unclear how much scrutiny the PBO will have had.
The Finance Department released some figures on Tuesday that give us a glimpse into the Liberal spending patterns over the past few years.
Now that all the receipts have come in for the 2018-19 fiscal year that ended March 31, the department says the final deficit for the year is $14 billion.
That’s pretty close to the $14.9 billion that was projected in the last budget, and not far off the $15.1 billion that the government planned for when it presented its plan for 2018-19 in Budget 2018.
But let’s peel the onion a bit so that we can understand what has been happening beneath the surface.
In Budget 2018, when the Trudeau government was first laying out its plan for the 2018-19 fiscal year, it expected to increase spending by 2.5 per cent, and it expected revenues to grow by 4.5 per cent.
That’s not what happened.
Instead, revenues surged. Tuesday’s final numbers show that the amount of money the government took in actually sprouted 6.7 per cent in the fiscal year, rather than the expected 4.5 per cent. That’s a difference of about $7 billion.
Yet the deficit didn’t shrink very much. What happened to all that extra money? They spent all $7 billion of it. Program expenses went up 4.7 per cent rather than the planned 2.5 per cent.
The only reason the deficit shrank a bit was because public debt charges were not as much as initially anticipated.
It’s a pattern that we’ve seen repeatedly in Justin Trudeau’s budgets. A fiscal windfall drops in their laps and it is immediately spent, absorbed by a new initiative.
Now, though, the parties are rolling out their promises without knowing whether or not that windfall will materialize to help with the financing – and there’s a good chance it won’t.
Billions spent on tax reductions, or maternity leaves, or housing affordability, all sound lovely in isolation.
But economists are warning of a global slump this year or next, and many central banks are already battening down the hatches with interest rate cuts.
The trade war between the United States and China takes no prisoners and economies all over the world are feeling the effects.
Most recently, global oil prices have taken on new volatility because of conflict in the Middle East – volatility that could help or hurt Canada and the federal treasury, depending on what happens to our currency and oil and gas production.
And we still don’t know how much unbudgeted spending the Liberals committed to over the summer.
If Canada runs into economic trouble like other countries are expecting to, are the party leaders hoping Canadians turn to the central bank for help through lower interest rates that are meant to stimulate the economy? Personal borrowing is already widely considered way too high, stretching consumers to a point where it’s doubtful that they would be able to shoulder a downturn.
Disruption has become commonplace in the global economy, but our political leaders are committing to new measures without a full conversation around how that disruption will be factored into their outlooks and their governing of the country.
That’s not something the parliamentary budget officer can fix.
What the parliamentary budget officer is doing during the campaign:
For the first time, for 120 days before Election Day, the PBO can respond to requests from parties to cost out individual promises.
The offer applies only to campaign promises within federal jurisdiction that come with sufficient detail.
Many requests for costing were given to the PBO in advance of the campaign so that the PBO could consult with relevant government departments for solid information. All exchanges of information were done under a tight agreement for confidentiality.
The PBO will not assess a full party platform for fiscal integrity. That will be left to outside economists, including former PBO Kevin Page and his team at the Institute of Fiscal Studies and Democracy at the University of Ottawa.
For the NDP, the PBO has released its analysis of promises to eliminate interest on student loans and to add a new tax on the extremely wealthy.
For the Conservatives, the PBO has published analysis of promises to cut personal income tax, give tax credits for maternity and parental leave, public transit, children’s arts and children’s fitness, and enhance government contributions for registered education savings plans.
No analysis of Liberal promises has been made public so far.
Heather Scoffield is a columnist for Torstar Syndication Services.