I wanted to tip my hat to the hard working folks at the PBO for a particularly revealing Economic and Fiscal Outlook that was published today. While the PBO has more than once eaten my lunch on various issues, they’ve done a superb job of looking at Canada’s economic and fiscal position.
I’d particularly like to point readers of this blog to page 2, where the impact of budget cutbacks—both federally and provincially—are aggregated, not only in their real GDP impact, but also in their employment impact. That is to say that when governments cut spending, jobs are lost as a result and those jobs not only include government workers, but also private sector workers. The PBO estimates that the aggregate employment impacts of federal and provincial cutbacks will be over 100,000 jobs by 2014 and 2015.
The outlook also points out the historic lows in both program spending and budgetary revenues. Program spending will hit 5.5% by 2016—we have never seen such a small federal government footprint on Canada’s economy in the post-war period. Budgetary revenues are no better off sitting at or below 15%, again an historically low tax rate severely limiting the federal government’s ability to create positive change.
Last but not least, on page 27, the PBO now appears to be including three measures of inequality in its boilerplate reporting. Granted, PBO has placed it on the second last page, but you won’t find that in the federal budget. Putting inequality on the same plane as GDP projections continues to highlight its impact on Canada’s economic state.