Economists Doubt Flaherty’s Claim of Straightening Budget by Closing Tax Loopholes Alone

This article was last updated on April 16, 2022

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Even though Jim Flaherty has repeatedly promoted the approach of the Conservative government to “stay-the-course” while preparing annual budgets, it may be an understatement this time around. The Finance Minister has already assured to make no more than few minor alterations in Thursday’s budget, keeping in mind the instability and shakiness of the global economy and its evident effect on Canada’s growth, majorly due to a still-struggling recovery in the U.S. Hence, the recovery process of Canada has also slowed, especially in light of the European debts and lingering banking woes, while the U.S. keeps on shaking from one fiscal crisis into another.

Sources confirmed that Mr. Flaherty was categorically informed by private-sector economists in the pre-budget consultations that they do not expect any more growth than almost 1.5% to 1.8% this year. Ottawa is now hoping that 2014 will deliver a somewhat better performance. Whereas, in the meantime, federal revenues keep on declining and more program spending cuts seem to be unavoidable, regardless of the plans of Conservatives to balance the books by 2015. Regardless of everything, Mr. Flaherty keeps on insisting that there are no tax increments or cuts to provincial transfers planned, as the government focuses on closing tax loopholes and other limited savings measures to straighten the budget this year.

However, the president of CEO of the Canadian Chamber of Commerce, Perrin Beatty, stated that “there are always surprise,” and the “ministers of finance love putting out the word that there are no surprises, just so they can surprise you.” However, he admitted that generally “the broad strokes of the budget are clear.”