Surprised the Liberals agreed to spend more money in order to secure NDP support in Parliament?

The NDP/Liberal budget initiative does promise $4.6 billion in new spending, which sounds like a lot of money, accustomed as we are to carrying around five, ten and 20 dollar bills. But the money is readily available, and much more to boot since the federal government takes in a lot more money than it spends.

The latest fiscal monitor put out by our very own Department of Finance reports — modestly — a budget surplus for the first 11 months of the fiscal year of about $19 billion. In February alone the budget surplus was about $5.8 billion, which is more than the amount the Liberals agreed to add this year to its budget for spending on foreign aid, the environment, post-secondary education and cities.

So, one month’s surplus can be used to fund the additional spending the NDP pried out of the Liberals, with $1.2 billion left over.

It is quite stunning the lengths the government will go to, to ensure citizens do not have a clear picture of national finances. And yet regular people have spending and revenue, and therefore budgets, and would be able understand what is going with Ottawa’s bank account, if they were given a fair picture.

Indeed, though thinking in billions can be a bit of stretch, managing the pocketbook is a lot more onerous and stressful than working on national finances. While single moms are below the poverty line, Ottawa can borrow at the best rates available in whatever quantities it wants; and for income it has taxes, not disappearing access to welfare, and low-paid jobs.

Overall, in the first 11 months of this fiscal year the federal coffers took in about $180 billion in revenue. It dedicated about $130 billion to spending on programs: money for people, transfers to the provinces, salaries, and purchases of goods and services, including lots for tanks and guns.

The operating surplus of the government was $50 billion. This is the difference between taxes (income) and program spending.

Since the government has debt, in the form of bonds and shorter-term treasury bills, it has financing charges. It must pay the interest on the outstanding debt. These financing charges of $31 billion can be deducted from the operating surplus to give the budgetary surplus of $19 billion.

Accumulated surpluses amount to over $60 billion for the past seven years. In other words, in its annual budgets the government has been deciding how much of our tax money it will not spend for current and future requirements. Then instead of investing in the future, it pays down the debt with this money.

Who loses from this strategy? Everybody whose needs go unmet, plus yet-to-be-born children and the environment.

TD Bank economist Don Drummond let the cat out of the bag. He did not like the spending increases because it forestalls cuts in income tax. So the best reason not to spend on health, education, the environment etc. is so the overpaid can pocket more in after-tax income.

Drummond used to be in charge of fiscal policy at the Department of Finance. Where once that job was about creating jobs and planning public investment, now it means count-and-then-hide the operating surplus. What used to be a higher calling — public service — is now about how to keep your fellow citizens in the dark.

Duncan Cameron

Duncan Cameron

Born in Victoria B.C. in 1944, Duncan now lives in Vancouver. Following graduation from the University of Alberta he joined the Department of Finance (Ottawa) in 1966 and was financial advisor to the...