RM
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RM Issue #031020

Speaking the `D' word
Oct. 14, 2003.

For two decades, governments across this country ran sustained deficits, causing damage that all Canadians will be paying to repair for years to come. The lesson was learned. But the correction has been taken too far, and made far too ideological. Governments are seemingly unable and unwilling to bend from the dictate that it's better to slash programs than to run even a small deficit in any given year. With money pouring in to treasuries over the last half-dozen years, governments were able to live by that ideology, able to support services with growing revenues. This year is a different story. With SARS, the slowdown in the United States, the high Canadian dollar, Ottawa's big surpluses have dried up, while Ontario has slipped into a deficit. So it is welcome to see politicians jettison the rigid, right-wing ideology, and discuss the choice between running a small deficit for one year, or slashing spending merely to make a point. Premier-designate Dalton McGuinty does not yet know the precise size of Ontario's deficit. But he suggested last week that if it is large enough to force deep spending cuts for the remainder of this year, it may be better to accept a deficit than to slash spending. Ontario will be more than halfway through its fiscal year by the time McGuinty takes over. In the months remaining, the cost of erasing a big deficit would almost certainly outweigh any benefits. Far better for McGuinty to deliver on promises to restore services, while maintaining a balanced budget over the life of his mandate. By the same token, federal Finance Minister John Manley also mused last week whether it's worth considering a return to a small deficit, if it meant Ottawa could free up $2 billion more to give the provinces for health care. Money that would normally be set aside in Ottawa's rainy-day fund might instead be spent on health care, Manley said. But to do that, Ottawa could either risk a small deficit, or have to withhold money from the fund to pay off the national debt. If the demands for the additional spending on health are strong enough to sway Parliament, then then risks could be taken, Manley said, adding that those are "political choices." And he is right. It strikes us as far more responsible to accept a small, one-time deficit to fund essential services, than to see Canada's hospitals further erode. What sense does it make to impose hardships on Canadians merely to prove the budget can be balanced, regardless of the economic conditions that prevail? We need political leaders in Queen's Park and Ottawa who are fiscally responsible, not doctrinaire.



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