Canada's Housing Bubble

Mar 11, 2010 Peter Zimonjic Parliamentary Bureau | QMI Agency

Ottawa - The government’s plan to get the country out of deficit in five years isn’t going to work and the feds “fiscal structure remains unsustainable over the long term,” says Kevin Page, the Parliamentary Budget Officer.

Page delivered his verdict on the deficit reduction plan, outlined by the government in the budget, in the PBO’s latest report: “Assessment of the Budget 2010 Economic and Fiscal Outlook.”

In the report Page takes issue with the government’s prediction that the Canada will be in “virtual balance” by 2014-15 and will only be running a deficit of $1.8 billion.

Page says by the same year Canada will still be running a deficit of $12.3 billion and to eliminate the deficit any quicker will require: “the economy operating significantly above its potential; actions to increase revenues or reduce spending … or some combination of both.”

The government condemned Page’s report insisting it’s out of line with leading bank economists who the government says describe the Tory’s deficit reduction plan as “reasonable.”

“Our forecasts are developed by taking an average of those developed by the private sector,” says Chisholm Pothier, director of media relations for Finance Minister Jim Flaherty.

“Private sector economists widely agree that these are a prudent basis for fiscal planning, even if Kevin Page doesn’t agree. He’s in the minority.”