By Niels Veldhuis
and Jason Clemens
The Fraser Institute
VANCOUVER, B.C. Mar. 24, 2017/ Troy Media/ – In listening to Finance Minister Bill Morneau deliver his government’s 2017 Budget, it’s clearly evident that the minister and his government believe their plan is working.
“A year and a half ago, our government set out to deliver the kind of change that would make a real difference for Canadians,” Minister Morneau noted in his speech. “We’ve delivered on behalf of Canadians.”
The 2017 Budget is littered with more great rhetoric, boldly noting: “Budget 2017 will help deliver a growing economy that works for every Canadian.” In fact, the 2017 budget mentions “economic growth” 51 times.
Sometimes the government claims to “support economic growth,” other times it “delivers economic growth” or “fosters economic growth” and even claims to “accelerate economic growth.” While the government and finance minister talk up a good game, their own budget actually shows the exact opposite.
But don’t believe us. Check it out for yourself. You don’t have to get deep into the budget – Table 1 provides the evidence. There you will find economic growth forecasts for the next five years, 2017 through 2021.
You will also find previous forecasts for the same period – those used in the government’s 2016 Budget delivered last March and those used in its 2016 Fall Update. The only thing that’s missing in Table 1 is the original five-year economic growth forecast the Liberals provided in their 2015 Fall Update, just weeks after being elected.
So are things actually getting better? Is the government “driving,” “fostering,” “accelerating” economic growth?
Well, in its 2015 Fall Update the Liberals forecasted average economic growth of 2.1 per cent over the next five years (2016-2020). Just months later, 2016 Budget cut average growth to 1.9 per cent over the coming five years.
Then just a half-year later, the 2016 Fall Update cut average economic growth again, this time to 1.8 per cent over the next five years. And then … wait for it … Budget 2017 cuts economic growth further to 1.7 per cent!
Now, you might think that reduction in average economic growth from 2.1 per cent to 1.7 isn’t that big of deal. But consider it this way. Since the Liberals’ first forecast in the 2015 Fall Update, expected GDP for 2017 has dropped by $62 billion or $1,700 per Canadian. Add up the reduced GDP expected over the next four years (2017 to 2020) and the result is a staggering $328 billion in lost GDP or nearly $9,000 per Canadian.
For an average Canadian family of four, that means a loss of nearly $36,000 in income over a five-year period.
The budget is entitled “Building a Stronger Middle Class” but the government’s own projections prove the opposite is actually occurring.
Niels Veldhuis and Jason Clemens are analysts at the Fraser Institute.
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