5.26.2007

the federal surplus: where does it go?

The federal of Canada government has an estimated budget surplus of $13.7 billion. After some $4 billion in earmarked spending is deducted, the surplus will be about $9.7 billion.

Where is all that money going? The provinces could sure use some of it.

8 comments:

Scott M. said...

Here's my right-winged tendancies coming out: it should pay down the debt.

We should continue paying down the debt until there is no more debt to pay down.

Then we should pay down the debt of lower levels of government (through transfers or tax shifting, etc). After all the debt is paid off, we can set priorities such as tax cuts or new programs. My preference? Child care, dental care and pharma care along with substantial tax cuts. Could we afford doing all four? Yep, our debt servicing costs are still over 25% of the budget.

I believe it insane that we should pass this burden on to our kids.

L-girl said...

Hey Scott, nice to see you. :)

Here's my right-winged tendancies coming out: it should pay down the debt.

I won't subscribe to the myth that responsible spending is right-wing and wild spending is left-wing. There's too much evidence to the contrary.

Paying down the debt, then funding child care, dental care and pharma care are excellent priorities.

Personally I don't care about tax cuts, unless they're for low-income people.

Scott M. said...

As far as tax cuts are concerned, for me it's a logical extension of having zero debt and a surplus. If you've funded all of the priorities, and you have a nice big stash-o-cash for emergencies or future economic downturns, tax cuts are the next logical choice.

I'm *not* in favour of willy-nilly handing out tax money just because you can (huge salary increases for gov't employees, etc). While you're right that there's little correlation between right-winged or left-winged *governments* and spending, the concept of being right-winged is still defined (to me at least) as a fiscally controlled government vs. a freeer spending/deficit spending government (left-winged).

L-girl said...

While you're right that there's little correlation between right-winged or left-winged *governments* and spending, the concept of being right-winged is still defined (to me at least

Well, you can define something however you like for yourself, but it's the evidence in the real world that defines our shared reality.

Right-wing governments run up huge deficits through military spending, unsustainable tax cuts and corporate welfare. Therefore the right-wing is not synonymous with fiscal responsibility, although it likes to say it is.

As far as spending, I don't advocate anything along the lines of "huge salary increases". But there's never a time when all social priorities are met. Housing, health care (including dental, prescription drugs and mental health), education, transit, environment - there are many places that could use more money. If we've got it, that's where it should go, IMO.

James said...

Ideally, pay down the debt and, after, that, put the surplus in a huge savings account against the next recession.

impudent strumpet said...

Why is everyone saying it *should* pay down the debt? Is that not what they're doing now? I always assumed that's what they're doing but never actually checked into it...

L-girl said...

Hm, good question, one that I wouldn't have known to ask. Let's see what folks say.

ImpStrump, I'm borrowing a post of yours soon. :)

M@ said...

Actually, paying down the debt is something I'll give Chretien credit for -- it's not something that's easy to sell to Canadians. Let's not forget that the Trudeau and Mulroney governments added huge amounts to the federal debt, and significant dollars go towards servicing that debt every year.

Less debt is a good thing. I'm not 100% against deficit spending in all cases, but paying down the debt we have gives us a better deal in the long run and reflects sound fiscal thinking.

That said, the Harper opposition hammered Chretien and Martin for having larger surpluses than projected each year, when they could have just reduced taxes and thereby reduced revenues, leaving Canadians' money in their pockets where it belongs. I can bear this government's overall fiscal policy (though on a program-by-program level I detest almost everything they do). I can't stand that kind of opportunism. Yes, they're politicians, they're two-faced... just because I know it doesn't mean I like it.

Wow. This was going to be a quick comment. Whoops...