August 28, 2015

$5B surplus: What the Fiscal Monitor really says about Canada's economy

Brian LilleyArchive

So as Justin Trudeau declares that the economy is getting worse and we need to turf the Harper government out comes the latest monthly fiscal monitor from Finance Canada.

This is a document prepared by bureaucrats and put out every month regardless of election cycles. There will be another in September before we vote and maybe those numbers won’t be so good for Stephen Harper and the Conservatives but this one is.

On June 2015, the budgetary surplus was $1.1 billion.

From April to June 2015, we achieved a budgetary surplus of $5.0 billion.

Sign of a bad economy? Look, we know things are not great in every part of Canada. I was just speaking to a guy who has worked the oil and gas sector for a long while and he tells me what it is like on the patch but this doesn’t make it sound like the wheels are falling off the bus.

Now let’s be clear, the fiscal monitor is an interesting data point and if you follow them monthly as I have for about a decade they can show you interesting trends but there are also seasonal variations. When did companies remit their income or payroll taxes? When did they pay their GST and how is that booked?

So one fiscal monitor, even one with a quarterly summary doesn’t prove the Conservative claim, put forward in a statement from Prime Minister Stephen Harper that: 

“The report shows that under our strong economic leadership, Canada had a $5 billion budget surplus for the first three months of the year. This means that we’re actually ahead of the game on our budget plan, while at the same time delivering historic tax relief directly to Canadian families. That’s good for Canada and good for the economy.”

It doesn’t prove that but then again neither does it prove the news release of the Liberals, the ones promising to run more deficits but complaining that this fiscal monitor proves nothing and Stephen Harper is running another deficit.

Complaining that the other guy might be running a deficit while you are promising to run several just isn’t a good campaign tactic.

Anyway, can this all be explained away as Justin Ling of Vice tried to do by saying, look, we sold the GM shares the government bought during the auto bailout?

No, it can’t be. And of course the purchase and bailout of GM counted to the deficit of the day, so of course you would count this towards your surplus but that is not the whole story either.

Let’s compare the first quarter of 2014 to the first quarter of 2015.

In every category revenue is up:

* Personal income taxes collected from April to the end of June are up from 31.1 billion to 32.9 billion

* Excise and duty taxes up from 11.9 billion to 13 billion

* Corporate income taxes are up from 9.8 to 10.3 billion

* Other revenues are up from 7.6 billion to 102 billion

* EI premiums collected are up from 6.7 billion to 7 billion

Now the spending side.

They held the line of direct program spending, 24.5 billion each year, transfers to people and provinces went up and public debt charges went down from 7.6 billion to 7 billion.

I’d say that is a pretty good record for the first three months of fiscal 2015.

The $5 billion surplus for the first three months of 2015 compares quite well to the 400 million dollar surplus from April to June of last year, even if you take out all of the GM share sale.

The June surplus in 2015 is down to 1.1 billion from 1.6 billion but as I said, monthly swings are wild, quarterly swings are less wild. The first three months of 2015 compare favourably for government finances.

Each party will try and use this data for their own devices.

What can I tell you objectively?

I can say that knowing what is happening in oil and gas and a few other sectors of the economy things will not be great going forward and probably are not as rosy as some Conservatives will have you believe but they also are not nearly as bad as the doom and gloom preached by the NDP and Liberals.

Final thought, I mentioned that the Conservatives held the line on program spending year over year. The NDP and Liberals have promised to do just one thing to that... increase it and increase it dramatically.

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commented 2015-09-01 16:24:24 -0400
In a situation where a nation is 3/4 trillon dollars in debt, any talk of “surplus” is illusionary and deceitful public book keeping – particularly when that national government has the power to pay its debts fully interest free without borrowing from private banks at interest.
commented 2015-09-01 11:42:56 -0400
Let’s see,whom shall I. bel!ieve? A part-time drama teacher? Or someone who actually knows something about. this stuff?
commented 2015-08-31 14:58:42 -0400
One thing I fail to understand with Liberal/NDP/Media Party talking points concerning the economy is that while Barack Obama, Dalton McGuinty, and Kathleen Wynne have had Moody’s and Standard and Poor downgrade the credit ratings of their jurisdictions, Stephen Harper has not had this happen to him. Given that, these people have a great deal of nerve lecturing to Harper the way they do.
commented 2015-08-31 10:37:44 -0400
There is no end to the false narratives (i.e. lies), of the MSM and the NDP/Lib . And even Martin comes back to engage in misrepresenting, which he used to do before.
commented 2015-08-30 14:46:50 -0400
I smelled something fishy withe the advent of the upcoming election these opposition partys’ starting to claim the economy and country was going down too fast as far as I was concerned, even after the snags in the road with the price of oil going down!
I knnew they wer trying to get the masses negative mentality of the economy slipping to a higher degree than what i was in order to help Mulcair and Tuudeau whom the MainStream Media Party absolutely adore as their little darlings’! It’s is quite aggrevating you know and can see this manipulation happening – but you cannot do much to stop it as I am only one person with a wife, kids and a few friends!
But, yes with the world economy being what it is and some of the negative people in America, China, Turkey et-al running the world things are not going to be Rosy however, things are not as dire as Mulcair and Justin would like to have you believe!
commented 2015-08-29 21:03:20 -0400
On the CBC news they reported that the government spent 1Billion less then it took in as revenue: they intentionly avoided using the word “surplus” … that must fool their regular halfwitted audience.
commented 2015-08-29 13:56:35 -0400
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commented 2015-08-29 13:18:59 -0400
Dave said, “I can’t figure out how we can claim a surplus when Canada’s debt clock say Canada owes over a trillion dollars.”

The surplus referred to is in the budget, not in paying off the debt. It is like saying that you have more money than all your monthly costs combined. That is the surplus, otherwise it would be called a deficit (not debt, but deficit).
commented 2015-08-29 10:55:43 -0400
I can’t figure out how we can claim a surplus when Canada’s debt clock say Canada owes over a trillion dollars.
commented 2015-08-29 10:26:11 -0400
Two things in life are certain, taxes and death.
commented 2015-08-29 10:23:16 -0400
“This whole system of government and banking has to go.”

I don’t think anyone here will disagree with the basic premise, changes are needed, but replace it with what? What policies should be enacted to ensure that the “new” replacing the “old” will not morph into the same or something worse? Who will be the “replacement figureheads” in the “new”? Who gets to decide the what, when, and the why of a new system?
commented 2015-08-29 10:23:14 -0400
Adam, if you call taxes is slavery, then I have two questions for you:
1. Can you define slavery please?
2. Without taxes, how does the government provide even the most basic services?

“Having a surplus of tax revenue just says that you were better at stealing real wealth from us and future generations than the other guy.”

Not necessarily. It could also mean that they are not spending as much of those taxes. This Conservatives government has LOWERED the taxes taken from the people whereas the Liberal have only ever raised and/or created new taxes.

“Taxes don’t pay for services and social programs, they service the interest on debt owed to the mega banks.”

That is a ridiculous statement. Of course they pay for services, how else do you think we have those services, pixie dust? But you are right that a significant portion does go to servicing the debt.

“Find the law that states you are required to pay federal income tax.”

It doesn’t exist, and you can opt out of the system, but it is unwise to do so. Don’t expect any services from the government because you will be denied any of it, including a licence to drive, insurance for anything, and a variety of other issues for opting out of the income tax system. Bad idea.
commented 2015-08-29 10:02:10 -0400
There can’t be a surplus for two reasons:
1. Justie and Tommie said so … and they said they are going to spend the surplus that does not exist.
2. Harper said there was a surplus and because all lefties know that Harper always lies, therefore there is no surplus, but they said they have plans to spend it.

Don’tcha just love leftie “logic”, logic solidly rooted in the flowing koolaid as they chug it down their throats.
commented 2015-08-29 09:39:25 -0400
Too bad none of this is actually realavent. When will people finally wake up and realize that the money changers are in charge? Taxes are slavery. Having a surplus of tax revenue just says that you were better at stealing real wealth from us and future generations than the other guy. Taxes don’t pay for services and social programs, they service the interest on debt owed to the mega banks. That’s it. Your elected officials need to borrow the money every year to pay for public services and then charge you and all future generations taxes to service the i test on that loan. For your efforts you get a devalued currency through inflation while the bankers walk away with trillions. Stop playing the game. Here’s a little quiz for you. Find the law that states you are required to pay federal income tax. I’ll help you out. It doesn’t exist. It’s implied that you may be prosecuted or fined for late payment, but nowhere does it say that you must pay at all. It’s a scam, a ponzi scheme. They use these scare tactics to keep everyone in line, and keep the gravy train running. This whole system of government and banking has to go. Its innately corrupt and always will be. Time to wake up people. They’re playing you like a fiddle and all you can say is “What tune would you like next, master”?
commented 2015-08-29 08:07:58 -0400
Thanks for the link Joan. I remember Liberal MP Ruby Dhalla pushing that agenda for immigrants, however I was unaware Mulcair had a similar agenda.

Let’s see, if we want a fiscally responsible government, lower taxes, close the door to immigration abusers, demand that the justice system uphold the laws not make new laws as they feel, demand that criminals actually serve their sentence, employment based on skill and knowledge not sexual orientation and race, believe that government’s role is to create a hospitable environment to aid the development of jobs (manufacturing) not create employment through more public sector jobs or funding for personal pet projects (see Ontario), no minority catering but rather programs that benefit the majority of Canadians, equal treatment of all religious affiliations (currently in Ontario: Lord’s prayer banned but ensured Islamic prayer allowances) well then I suppose we will be labeled racist, women haters, homophobic, islamophobic, etc. by the left. This is the new reality in Canada.

“If we don’t get a Harper landslide to keep these clowns in check, we’re doomed.”
Very true.
commented 2015-08-29 08:07:56 -0400
troodo – just one fkg stupid guy – too much chronic in troodo’s past

this fkg troodo idiot speaks with the assumption that he is believable – hardly the case – yep, troodo – one dim-witted stupid fkr!!!
commented 2015-08-29 07:57:17 -0400
Joan that articles is sad but so true. Sad that an immigrant who just got off the boat has the same. Vote a born in Canada citizen has. The NDP target them.
commented 2015-08-29 07:50:31 -0400
Peter Babich I’m with you. Love the Feds hate the provincial. Last poll Mulclair was voted best suited to run the economy. Is that some sick joke?
commented 2015-08-29 02:28:14 -0400
And everyone wonders why I’m so angry. I love my federal govt, hate my provincial. Idiots. If we don’t get a Harper landslide to keep these clowns in check, we’re doomed. What will we do to accomplish this? We need to get the truth out
commented 2015-08-29 01:30:36 -0400
saw some EXPERT on CBC defending the almost 1900% increase in taxes since1961 saying that pensions and such are not taxes, well sure they are when Paul Martin steals the money to make a phony surplus, and when you are forced to pay them. The CBC is such a joke
commented 2015-08-28 23:48:06 -0400
The economy is doing very well considering the Media Party claims Stephen Harper put all his eggs in with big oil. What I noticed is that we reduced our debt AND increased spending on social programs and infrastructure paid to the provinces (what they did with that money is not under federal control).
commented 2015-08-28 22:20:01 -0400
Yvette, the only plan Trudeau has for Aboriginals is to legalize pot and keep their youth dropping out of school and staying on the reserves.

Of course Trudeau and Mulcair are going to misinterpret the drop in oil prices as doomsday news and themselves as avengers and magicians.

It comes down to credibility. Who will Canadians believe?
commented 2015-08-28 21:02:09 -0400
Peter N. I swear you must have been listening to the same radio talk show this morning that I was, but I know you are not from Mb. The guest commented on everything you posted here & mentioned the huge surplus left by Martin, but omitted how the surplus came about. As for the stimulus, PM Harper may have saved the day he said, but only because he was pushed & besides he used the surplus to do it. As for Trudeau he flaps his mouth about the current deficit & in the second breath he would run short term deficits until 2019. He’s ready to spend almost $3B over 4 yrs on aboriginal issues & increase the current $65B spent by the Conservatives to $125B for infrastructure over the next decade (I guess he figures he would be in power for over 2 terms), pompous ass. He’s promising the moon & the stars, but forgets to tell you where all this money will come from. I wonder who the manufacturer for his “money printing machine” will be.
commented 2015-08-28 20:32:20 -0400
Brian great video
commented 2015-08-28 20:14:08 -0400
The Trud, (should that be u r?) is a ‘Straw Man Clutching’. Only the big boys go in to the Deep End, Justy.
commented 2015-08-28 19:56:03 -0400
GEORGE DYER said: “Sorry for taking this a bit off topic, but I just wanted to mention that I believe I’ve seen a non-cropped version of the headlining photo that appears to show Justin speaking in front of a large gathering of hard-working people wearing hard-hats and safety vests. The version I’ve seen showed most of them wearing sandals and flip-flops on their feet. Who really are these people? Where did they come from? I’ve just realized, maybe the “flip-flops” are symbolic. Huh! Maybe I’m not so off topic as I thought.” Sandals and flip flops is opposite to what working people would need for their jobs, Health and Safety Regulations being what they are. They are plants. Paid for by the Lieberal Party, or more likely by taxpayers to create an image……..!
commented 2015-08-28 19:49:15 -0400
Facts mean nothing to Lieberals and Socialists! Come to think of it, same thing!