Categories: The Bull Meter

The Bull Meter: Michael Ignatieff on the Conservatives’ economic record

In 2009, the federal government’s balance sheet went from showing a surplus of $9.597…

by Julia Belluz on Thursday, March 31, 2011 3:06pm - 37 Comments
Ignatieff_bull
"[The Conservatives] spent all kinds of money to put us into a deficit before the recession… We found ourselves confronting a record deficit."
- Michael Ignatieff
March 28, 2011

Bull Meter score:

In 2009, the federal government’s balance sheet went from showing a surplus of $9.597 billion to a deficit of $5.755 billion. Last year, the deficit was a record $55.6 billion. But how did we get here?

According to a November 2008 assessment by Parliamentary Budget Officer Kevin Page, the Tories’ decision to cut the GST, coupled with an increase in government spending caused the deficit—not the global economic crisis. By February 2011, the budget watchdog’s position was much the same: the deficit is structural, caused by policy not recession. The PBO also said that contrary to the federal government’s budget forecast of a surplus for 2015-16, a deficit of $10 billion would remain by mid-decade. “Sustained fiscal actions,” Page reported, are needed to “avoid excessive debt-to-GDP accumulation.”

We called Stephen Gordon, an economist at Laval University, to get his take. “Yes, the Conservatives caused the structural deficit,” he said, adding that cutting the GST was a mistake. “They basically blew $10 to $12 billion, and that’s the PBO’s estimate for the structural deficit in 2015. But at the time [when GST was cut in 2006 and 2008], we were taking those $10 to $15 billion surpluses for granted.”

Heard something that doesn’t sound quite right? Send quotes from the campaign trail to macbullmeter@gmail.com and we’ll tell you just how much bull they contain.

Sources:

Bank of Canada

Public Accounts of Canada 2010

Parliamentary Budget Office Economic and Fiscal Assessment November 2008

House of Commons Standing Committee on Finance

Worthwhile Canadian Initiative Blog

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  • jonatwitan

    I think Mike T. would agree with me that this is an absolute outrage! Ridiculous right wing rag mag! One bull! But Lord Ignat….I mean Mr. Ignatieff DOES NOT LIE, do you hear me, he doesn't, and neither does any Liberal. They can't! Because if they did lie, that would mean they are Conservative, because only Conservatives lie and are full of Bull! The Bull Meter gets it wrong again!!!!

    Sorry, I'm in a weird mood, and I don't think I'm very good at this hyper partisan stuff anyway. I tried.

    • Mike T.

      To give your post perhaps more attention than it is worth, I too thought declining economic circumstances might have played a role (perhaps the reason for the single bull?), but the content of the post convinced me otherwise.

    • SanDiegoDave

      It's not bad, not bad at all. I would use all caps more and you definitely lose points for not saying "msm" or "bias". If you want to full mindless, spittle-spraying hyperpartisan emotional invective, see chet. For general rudeness, anyone of us will do, although alfanerd is particularly good at it. Must be his non-arts degree.

    • jonatwitan

      Just to clarify…it was only too predictable that some people would come out wondering why there was one bull on this statement. That was the inspiration for my faux outrage.

  • Thwim

    I'm curious.. why the one bull? If there was something that was bull about what Mr. Ignatieff said here, your article doesn't spell it out very clearly. Could you clarify?

    • Not Stephen Colbert

      I think I've figured it out: it's because Ignatieff said the Conservatives have spent "all kinds of money", when in fact they only spent one kind of money (i.e. Canadian dollars).

      • auntie-em-m

        ;0)

  • catherine

    I guess I should have read the intro post to this bull stuff, because I'm not getting it. Ignatieff says Harper caused a deficit before the recession, and financial experts say Harper caused a structural deficit independent of the recession (which I already knew to be the case). Shouldn't this be a negative bull? Or is 1 Maclean's bull like -2 bulls in absolute units?

  • Proud Canadian

    The truth will set you free but tory lies cost Billions! read what the rest of the world is saying about Harper at
    http://www.theaustralian.com.au/news/world/canada

    Shame on Harper.

  • catherine

    I think if you shift the origin to 2 bulls so you have a negative and positive bull axis, it makes sense. :)

  • Stewart_Smith

    I can understand the reluctance to throw out a no-bull tag, Ms. Beluz. After all, you would be thrown into the Aaron Wherry pit of leftism by some. However, you should at least have found some economist or perhaps even political commenter to quote something about the deficit not being Harper's baby.

    • former_ADB

      Perhaps the one bull is given because while the Conservatives initiated (by cutting the GST) a structural deficit before the recession, Canada only registered a deficit after the recession started,

      • FVerhoeven

        Yeah, but at one time or another, I forget when, the LIberals wanted to do away with the GST entirely!

        So, who knows what the Liberal financial plans will be once they hold office.

        • former_ADB

          But they decided not to because it would be too expensive (and so cause a structural deficit).

  • anon

    It's fashionable to say the deficit is at "record" levels, and even the writer of this piece said it is. But "record" is politically loaded in and of itself. The deficit, as a proportion of GDP, is much much lower than previous deficits run by the federal government. Throwing the $55.6 billion number around doesn't account for the growth in the Canadian economy since the last deficit, or inflation in the currency.

    • former_ADB

      This is a fair point.

      But the role of the GST cut in the structural deficit is not in doubt.

    • Stewart_Smith

      I was wondering about your statement above, because most comparisons I have seen are for the accumulated deficit versus GDP and of course we are no where near the situation in the early 90's. Still the record deficit above accounts for over 4% of that years GDP.

      Found an excellent source: the graph is on page 9. http://www.instituteforgovernment.org.uk/pdfs/Can…

      Both Trudeau & Mulroney ran significantly higher deficits than 4%. (Trudeau's record was over 8%, Mulroney topped out at 7%) However, averaged over their entire tenure, Trudeau was a little under 4%, Mulroney slightly over.

      To me this says that while last year's deficit is not an immediate disaster, if it isn't dealt with it is a long slow train wreck just getting started.

  • FVerhoeven

    Ah, McCleans has found a new way around. Now it's about dishing out bs scores.

    My bet is that the Liberals will never score 5 or 4 out of 5. Perhaps not even a 3 out of 5.

    Let's see, my prediction will be that the Tories will score 4 or 5 out of 5 at all times.

    Love the games being played. Wondering what comes next.

  • Kyle

    Over five years Stephen Harper increased spending 30% faster than Bob Rae did as Premiere of Ontario.

  • Tach

    I guess he gets one bull because he said that it was the spending that caused the deficit, when it was really a combination of increased spending and ill advised and inefficient tax cuts.

  • BGLong

    Check the local rules … maybe there's a one bull handicap … kinda like golf ?

  • Just Joe

    So I guess you're postulating that The Harper Government is beneath contempt. ;-)

  • hosertohoosier

    I think the problem with Ignatieff's claim is that it presumes a counterfactual in which the Liberals would have spent none of that surplus. Off the top of my head, Martin had proposed a childcare program, the 5 billion Kelowna accord, and income tax cuts not matched by the Tories. Moreover, Martin tended to lowball surplus projections, and then spend or cut taxes with the "surprise" windfall.

    Secondly, not only is the deficit smaller than the early 90s deficit as a % of GDP, it is also smaller if you account for inflation. According to the Bank of Canada inflation calculator, $42 in 1993 is the equivalent of $57 today, suggesting that the 2010 deficit is smaller in real terms than the 1993 one.

    • criselis

      So no need to hold up the deficit as a reason to cut funding to social programs right?

  • Leo

    This from Scott Reid, right after the 2008 coalition attempt. These guys will never play nice!!!

    "Stephen Harper is the most dangerous animal lurking in the jungles of Parliament. He is a threat to the future viability of the Liberals. A blood simple opponent of the NDP and the only serious contemporary challenge to the Bloc Quebecois.

    This becomes relevant because suddenly, he is weak. In fact, at this particular moment, he is almost unable to defend himself. Owing to a ridiculously ill-considered act of hubris, he has laid himself vulnerable to his opponents. Their imperative could not be more clear: kill him. Kill him dead. Do not, whatever you do, provide him with an opportunity to extend his hold on power. Because you can be damn certain he will never again be so reckless as to give you a chance to finish him off."

  • hosertohoosier

    Also, if the issue is the structural deficit, our present problems don't even come close to a record. Here is a chart (from Stephen Gordon's blog) showing the structural balance (stripped of business cycle effects) and the primary structural balance (excluding debt charges) as a % of GDP from the late 70s till the present:
    http://worthwhile.typepad.com/.a/6a00d83451688169…

    Note that the structural balance has declined in pretty much a straight line since it peaked around 2000.

  • george

    This guy desperately trying to catch power to rule Canada. It stinks…

  • Ross

    What can Isay , except that the "Conservatives" are not so conservative when it comes to fixing something that ain't broke, all they've been doing is trying to buy their way into power so they can FATTEN UP the " GREED BROKERS" and keep the masses as close to poverty as sustainable, after all It's the masses money they are using to feed the few. You have to admit when it came to fixing the finances of this great country , Chretien and Martin got it right only to be messed up by the Conservatives. NO BULL

  • FPiorkowski

    Iggy was waving his red promiss book the same as Chretien did a few years ago. Chretien used his to slap us in the face. At least Iggy has told us that the GST is going back up but he hasn't said by to 7% or 8%.

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