July 26, 2008

Soopreeze!! Canada's in the red (hahahaha, Harper !!)

Federal government begins fiscal year in the red

Harper calls federal byelections on same day deficit was reported

Paul Vieira and Juliet O'Neill, Canwest News Service

Published: Saturday, July 26, 2008

OTTAWA -- Prime Minister Stephen Harper is sending voters in three ridings to the polls in early September amid renewed speculation about a fall election and reports that the federal government was in deficit for the first part of the year -- a rare departure from the billion-dollar surpluses that have been the norm.

Harper announced the Sept. 8 by-election dates for the ridings -- two in Quebec and one in Ontario -- without further comment on Friday.

But the parties see the by-elections as an opportunity to take their potential general election campaign themes -- leadership, environment, the economy and crime -- for a test run ahead of a federal election that Liberal leader Stephane Dion said Friday could come "maybe the fall, maybe the winter."

Earlier this week he'd noted there was a "bubbling appetite" for a federal election.

Dion has already put his Green Shift carbon tax proposal out as a central Liberal policy platform, holding town halls across the country to try to persuade Canadians that personal and business tax cuts his party has promised would buffer a proposed carbon tax aimed at reducing use of fossil fuels by industry and consumers.

"This election will be determinate not only for the next four years but will give a path for the next 40 years," Dion said in a telephone interview with the Montreal Gazette.

Dion asserted Friday that voters in the southern Ontario riding of Guelph and the Montreal-area ridings of Westmount-Ville Marie and St-Lambert will use the opportunity to send Harper "a strong message that they don't like the way he is running the country."

Conservatives say that since two of the ridings -- Guelph and Westmount-Ville Marie -- were held by the Liberals, the contest is about Dion's leadership, which the Tories have attacked as weak since Dion succeeded Paul Martin in late 2006. St-Lambert was held by the Bloc Quebecois.

Meanwhile, the Finance Department disclosed in its monthly fiscal monitor on Friday that Ottawa had recorded a $500-million deficit for the first two months of the 2008 fiscal year -- a stunning contrast to the $2.8-billion surplus it posted for the same period a year ago.

The department attributed the results to a drop in revenue from corporate taxes and the GST, and a seven-per-cent increase in spending.

"The results of the first two months of the fiscal year are not indicative of the outcome for the year as a whole," the Finance Department said in a statement accompanying the results.

Analysts also warned against making too much from two months of financial results. Nevertheless, it was suggested that the double-digit drop in corporate tax proceeds -- a major engine of federal revenue growth in recent years -- might ring some alarm bells in Ottawa.

"This year's budget did call for a narrowing of the surplus and some deterioration in the budget numbers was to be expected. But it does seem to be coming a bit earlier in the year than expected," said Douglas Porter, deputy chief economist at BMO Capital Markets in Toronto.



Do you think the federal government has had a history of hiding its surpluses?

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