As the federal leaders battle over how to balance the budget, the former parliamentary budget officer says the entire notion of doing so may be unrealistic for the current economic environment.
on Wednesday that the leaders鈥� focus on balancing the books may not be the best economic and fiscal management plan for Canada鈥檚 economy, which has seen five consecutive months of decline. The concerns have spurred talk of a possible recession.
鈥淒oes it make sense to cut back on government spending in this environment to get to budgetary balance? I don鈥檛 think it does. I think it鈥檚 very normal when we have a recession to run deficits,鈥� said Page.
The economy has been one of the major themes of the election so far.
While Conservative Leader Stephen Harper has maintained his government鈥檚 commitment to a balanced budget, NDP Leader Tom Mulcair said this week that his party would also balance the books next year.
Liberal Leader Justin Trudeau, however, stood out on this front, refusing to commit to a no-deficit budget right away. Rather, he said balance may take time, depending on how much of a 鈥渕ess鈥� the Harper government leaves behind.
Close to balance this year
With a recently volatile global economy, Harper has faced questions about whether his Conservative government will actually balance this budget this year, as has been long promised.
Page said he expects the budget to be close to balanced, if not a small deficit, when the final numbers come out in a few months.
鈥淲e could be very close to balanced,鈥� said Page. "We鈥檝e already had five reported months of economic decline so that means weak revenue growth, that means higher spending on a number programs. So I think most economists are expecting a small deficit.鈥�
If there is a deficit this year, Page said the government may be able to get back into the growth range of 2 to 2.5 per cent next year.
Time for stimulus?
Considering the economic worries at home and abroad, Page also said it might be time to have more of an open debate about the need for stimulus.
鈥淚 think there are opportunities with record low interest rates to stimulate the economy through additional investments in public capital.鈥�
