This is an excellent commentary by MP Ralph Goodale:
STEPHEN HARPER’S LEGACY OF DEBT
The Harper government passed an embarrassing milestone last week.
After months of denial, the Conservatives finally had to release the audited financial statements of the Government of Canada for last fiscal year (2008/09). They revealed that for the first time in more than a decade, this country fell back into the red by about $6 billion.
Here’s a key point to note: This deficit began BEFORE, not because of, the recession!
These financial statements reflect primarily what was happening BEFORE the recession hit last fall.
They show how the Conservatives wildly increased spending by a whopping 18% between 2006 and 2008. That’s three-times the rate of inflation.
They show how the Conservatives eroded Canada’s tax base, and recklessly eliminated all the “reserves” which had been built into the federal books to protect against sudden nasty downturns
All that happened BEFORE there was any recession.
So when the housing market collapsed in the United States and American banks began to fail last fall – spreading economic contagion around the world – Canada had nothing left to protect itself.
We were forced back into deficit because our financial strength had been squandered through Conservative fiscal tomfoolery when times were still good.
Two key points are clear:
1. If the prudent fiscal policies of previous Liberal governments had stayed in effect in this country after the government changed in 2006, Canada’s deficit today (even with the recession) would be only a fraction of what it is; and
2. With Mr. Harper’s reckless fiscal policies, Canada would have a deficit today no matter what – even if there had been no recession at all.
For the future, his numbers will get worse. Mr. Harper is another $56 billion in the hole this year (2009/10), and his total legacy of debt will balloon to more than $170 billion.