Hundreds of cellphones were raised in the air Saturday, Dec. 2, 2017, as supporters tried to capture a picture of Prime Minister Justin Trudeau as he made his rounds at Semiahmoo Secondary. (Aaron Hinks photo)

PBO sets budget baseline for campaign vows with tools, deficit projections

Parliament’s spending watchdog estimates that federal books will be in the red by $20.7 billion this year

Parliament’s spending watchdog is predicting years of deficits deeper than the government has laid out.

The numbers are in a report the parliamentary budget office says should set the baseline for the campaign promises parties will dangle in front of voters this fall.

WATCH: Five highlights in the 2019 federal budget

The PBO estimates that federal books will be in the red by $20.7 billion this year and bottom out at a deficit of $23.3 billion the year after, before improving to a $12.5-billion deficit by 2022.

The numbers are better than the PBO predicted in April but worse than the figures in Finance Minister Bill Morneau’s pre-election budget that forecast deficits between $19.8 billion and $12.1 billion.

The estimates and a new online costing tool are part of PBO efforts to prepare for its role as an independent auditor of each party’s spending plans in the upcoming election campaign. The watchdog office plans to post cost estimates of campaign promises as the parties announce them before and during the campaign.

The report is likely to make it more difficult for any party to cook its own projections and also makes it difficult for any party to promise a quick return to balanced budgets.

Still, the PBO offers one possibility for making up some of the shortfall in a separate report detailing how much the government loses to tax evasion, to overseas tax havens, and through tax avoidance through legal loopholes that contravene the spirit of income-tax laws.

The difference between what is collected and what could be collected absent tax-evasion schemes is known as the “tax gap.”

The Canada Revenue Agency, in a report earlier in the week, pegged the lost take in federal corporate income taxes in 2014 at between $9.4 billion and $11.4 billion. But by looking at electronic transfers into and out of Canada, as well as special tax filings, the budget office gives a “hypothetical” estimate that $25 billion might have been lost in corporate tax revenue.

What the PBO was more certain of is that money flowing between Canada and countries known to be tax havens was “disproportionately large.”

“One thing is clear — we need greater transparency on corporate finances and financial flows, including who owns what companies,” said Toby Sanger, executive director of Canadians for Tax Fairness, in a statement.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Chilliwack wades into backyard chickens in urban areas

Permit came with several conditions and can be reconsidered by council

Big Bar Landslide saw long awaited blasting this week

Pressure has been on senior governments working with First Nations to remove blockage for months

Two prolific offenders from Alberta lead RCMP on chase across Fraser Valley

Men first reported in Chilliwack ending with allegedly stolen vehicle in an Abbotsford pond

From the Chilliwack Progress Archives: Fearing an Aryan invasion

In 1995, Chilliwack Mayor John Les was concerned about the idea of an ‘Aryan Fest’ coming to town.

COLUMN: Trying to look forward while looking back

Reader suggests re-running a 2015 Times column after recent racism towards Indigenous people

VIDEO: 2020 BC Winter Games wrap up in Fort St. John as torch passes to Maple Ridge

More than 1,000 athletes competed in the 2020 BC Winter Games

Winds up to 70 km/hr expected across Metro Vancouver

Winds are expected to subside overnight

Still six cases of COVID-19 in B.C. despite reports of Air Canada passenger: ministry

Health ministry wouldn’t comment on specific flight routes

Violent ends to past Indigenous protests haunt Trudeau government

Trudeau adopted a more assertive tone Friday, insisting the barricade must come down

Fraser Health warns some schools of possible COVID-19 exposure

A sixth COVID-19 patient is a woman in her 30s in the Fraser Health region who recently returned from Iran

High-risk sex offender cuts off ankle bracelet, on the loose in Vancouver: police

Vancouver police said Kirstjon Olson, 38, is a provincial sex offender with 27 court-ordered conditions

HIGHLIGHTS: Day one and two at the 2020 BC Winter Games

Athletes had sunny – but cold – weather to work with in Fort St. John

Most Read