Less than five years ago, in September 2007, the Conservative Party of Canada ("CPC") announced Canada had just run a $13.8 billion surplus for the government's 2006-2007 fiscal year, inherited from the Liberals.
A year later, in October 2008, Stephen Harper said, "We'll never go back into deficit." He criticized Stephane Dion for "enormous spending promises that we can't afford," and said, "[Dion] would put Canada into deficit again."
Three months later, in January 2009, Finance Minister Jim Flaherty's federal budget stated that, "Canada needs to run a temporary deficit." After an "explicit adjustment for the risks to the private sector," Flaherty projected deficits of $33.7 billion in 2009–10 and a surplus of $0.7 billion in 2013–14.
Instead of the projected figure of $33.7 billion, the 2009-2010 federal deficit run by the CPC ended up being $55.6 billion, a difference of $21.9 billion. It looked like the 2015-2016 fiscal year was the earliest date by which the deficit could be eliminated and Flaherty's March 2011 update said as much.
But then, a month later during the 2011 federal election, the CPC promised to eliminate the deficit by 2014-2015. By an amazing coincidence, the CPC's outlook on balancing the budget became much rosier at the same time that an election campaign was taking place. Stephen Harper said, "Our platform is realistic, accurately costed and looks four years down the road." The CPC not only forecasted that the deficit would be gone by 2014-2015, but that Canada would run a $3.7 billion surplus that year.
Seven months later, the platform was not realistic any more. The November 2011 budget update from Flaherty said he would not balance the budget until 2015-2016. The projected surplus of $3.7 billion for 2014-2015 had turned into a projected deficit of $0.3 billion (and if history is any guide that might be off by tens of billions of dollars).
The CPC platform in 2011 was to eliminate the deficit by "controlling spending and cutting waste." In terms of controlling spending, we're told the CPC is ahead of schedule when it comes to making cuts and Tony Clement has told Canadians that cuts may be twice as deep as originally stated ($8 billion instead of $4 billion), yet the CPC is still going to fall short on the promise it made just 9 months ago during the election.
The CPC's excuse is that the economy is underperforming but: (A) they said they were going to "adjust" for the risk of poor performances; (B) the economy grew by an unexpectedly strong 3.5% in the third quarter; (C) government revenues for the first eight months of 2011 were up $5.7 billion, mostly thanks to income tax; and (D) the CPC prides itself on its effective management the economy. The party's "steady hand on the tiller" supposedly makes Canada's economy better than all other G-7 nations, yet they consistently miss the target they are aiming at.
The other confusing part about all this is that half of the CPC's plan to eliminate the deficit was to control spending but that has not really happened. For example, the party's failure to get deficit reduction on track did not dissuade the CPC from moving ahead with its omnibus amendments to the criminal law in Canada despite the costs associated with those amendments.
For a party that prides itself on its nuanced understanding of the Canadian economy and its fiscal conservatism, it seems like the CPC has no idea what is going on with the economy or how to meet its budgetary objectives.
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