Fleishman Hillard: The Political View

Budget Officer Kevin Page (By cbc.ca)

Paul Rutherford of the QMI Agency had a great take on things when he wrote that it’s a good thing Canadians are laser-focused on the Olympics right now, or else they might have been more alarmed by the last comments from Canada’s Parliamentary Budget Officer Kevin Page. The budget boss laid out a frightening scenario that begins next year with the largest wave of retirements in Canadian history and then escalates into an economic mix that includes falling tax revenues, slower economic growth and huge increases in health care and old-age benefits on the spending side. Or a “demographic time bomb” as the Toronto Star called it. It doesn’t seem so long ago that Paul Martin crowed about whipping the deficit. Now we have an even more disastrous fiscal crisis looming.

Page warned that without action now, the debt will be almost 34 per cent of our Gross Domestic Product by 2013, then balloon to 100 per cent of our GDP by 2050 and, if left unchecked, could be four times the size of our economy by 2085. Imagine the financial mess that will leave behind for our children and grandchildren. Page says it will take some serious tax increases and spending cuts – the Buckley’s cough syrup of public policy — to tame the situation.

But governments don’t have a bright and shiny record on tackling long-term issues like this, particularly minority governments (even when they try to). Just ask Joe Clark. It’s true that we need the economy to fully recover before we start taking our medicine. But then it will be interesting to see how political leaders of all stripes address these longer-term fiscal issues and how concerned thoughtful Canadians will be about them on behalf of their children and their children’s children. A www.cbc.ca poll asking online readers if they are worried about this fiscal outlook showed a result of 65 per cent of Canadians responding ‘Yes,’ and only 24 per cent ‘No,’ with 10 per cent unsure.