Friday, July 30, 2010

The shrinking deficit

We already had news that the deficit is already down by 41% so far this year Now it seems the Conference Board thinks the budget will be balanced a year earlier. Once again kevin page and the grits are wrong. The Conference Board is predicting 7.2% growth. That's a good start, but let's hope there are more cuts to make the deficit shrink even faster.

OTTAWA — So long as the federal government keeps its pledge on curbing program spending, Ottawa should return to a surplus position one year ahead of schedule based on how the economy is unfolding, the Conference Board of Canada said Thursday.

"A more positive fiscal outcome now appears to be unfolding" for the federal government, according to a commentary co-authored by the board's chief economist, Glen Hodgson.

The same can't be said for Canada's provinces, the piece said, and they have difficult choices ahead in the coming years due to mounting health care costs.

In a commentary published on its board's website, Hodgson and senior economist Matthew Stewart said they anticipate that nominal GDP — which is growth unadjusted for inflation and represents the base from which government collects taxes — will surge 7.2 per cent this year, compared with the 4.9 per cent expectation in budget 2010.

"This is a very strong first step on the path to restoring fiscal balance at the federal level."

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