Can Harper cut the deficit down in three years?
Published Monday, May 9, 2011 9:37PM EDT
One of Prime Minister Stephen Harper's major campaign pledges was to slay the deficit in three years instead of four, finding $11 billion in savings that wasn't found in his pre-election March budget.
The government, now with a safe majority, is expected to introduce nearly the same budget, but with a more aggressive approach to paying down the deficit.
Currently, the Conservatives project a deficit of $29.5 billion for this fiscal year and a return to surpluses by 2014-2015.
William Robson, president of the think-tank C.D. Howe Institute, says the government could make some progress on the deficit in the short-term if the economic continues to recover.
"I think we are going to be seeing some better news on the growth side of the tax base than a lot of forecasters have been calling for," he told CTV's Power Play Monday.
Robson also predicted the Conservative's corporate tax cuts would lead to an expansion of the business sector.
But he added that cutting government spending is "very difficult" -- which is how Harper plans to quicken the pace of slaying the deficit.
Scott Clark, who was deputy finance minister during the late 1990s, said that not everyone, including Parliamentary Budget Officer Kevin Page and the International Monetary Fund, thinks the government can return to surpluses after four years, let alone three.
"Now we are moving it a year shorter . . . and he needs to find $4-billion in savings annually, moving forward," he told Power Play.
Clark noted that Harper promised to find the savings through "efficiencies" during the election campaign.
"As an old bureaucrat . . . we used to use the word ‘efficiencies' for ‘we don't know where to get it,'" he said.
"In my view, finding that amount of savings will require cuts to programs and cut to employment at the federal level."
The government has suggested that some savings could be found through attrition, as 80,000 public servants are expected to retire this decade.
"You can't do this without some reductions in federal government employment," Robson said. "The growth in federal government employment over the last decade has been quite startling."