Finance and PBO each released two reports at the onset of the recession in late and that are the source of their most dramatic forecasting errors. But the accuracy of the forecasts from both sides has improved since the peak of the recession. Both Finance and PBO were provided with the opportunity to review the Globe and Mail's comparison and provide input and comment. Flaherty's spokesman, said in an e-mail. Pothier pointed out that private-sector economists and the International Monetary Fund were also caught off-guard by the depths of the global recession and its impact on government bottom lines around the world.
For his part, Mr. Page noted that the differences are minor and based on a very small sample of three years. The Conservatives created the PBO, but the government has since faced questions about the level of funding provided and its willingness to hand over government spending data.
Finance Canada says the department has 10 full-time employees who work on fiscal analysis and forecasting, but only five of those work solely on fiscal forecasts. Until this June, the PBO and Finance both relied on the same average of private-sector forecasters for assumptions regarding the strength of economic growth. That means any differences of opinion were focused on the impact of fiscal decisions like government spending or restraint.
In June, PBO announced that it will produce its own forecasts for economic growth and will no longer rely on the private-sector average. The last time Ottawa erased the deficit in the mids, some accused Liberal finance minister Paul Martin of using excessively dire deficit projections to justify painful spending cuts to health, education and employment insurance. The ultimately inaccurate forecasts also set the stage for the government to later boast of beating its own targets.
Otherwise, it predicts, the crisis can only get worse. That is the scale of the challenge. It's not clear that the coalition partners would have met it.
It is quite clear that the Conservative government they inadvertently emboldened will not. Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. To order copies of Toronto Star articles, please go to: www. It seems he was right. The only surprise is that it took the Liberals a week to figure this out. Thomas Walkom's column appears Wednesday and Saturday. Report an error.
Journalistic Standards. About The Star. More Opinion. Flaherty claimed that the government never expects to have need of these new powers, but wants to ensure it has "the flexibility to respond quickly and decisively, and protect our financial system from global risks. The opposition parties' threat to defeat the government has apparently taken the Conservatives by surprise. The Conservatives are demagogically presenting the elimination of this subsidy, which was introduced when the previous Liberal government severely restricted union and corporate political donations, as a cost-cutting measure.
In fact, it is aimed at bankrupting the opposition parties, which have been far less successful in building up a financial base of support under the new rules. The Conservative maneuver has so shaken the Liberals, the principal losers in the October 14 general election, that they have been forced to join the other opposition parties in threatening to topple the government if it doesn't back down by the time of an initial vote on the economic update scheduled for this Monday.
According to press reports, on Thursday evening the Liberals and NDP were involved in informal negotiations on a governmental alliance or even a coalition government.
Canada's social democrats have a long history of aligning with the Liberals, the Canadian bourgeoisie's traditional party of government.
For half a year in , the NDP propped up a Liberal minority government headed by Paul Martin, who as finance minister had presided over the biggest spending and tax cuts in Canadian history. The fall of the government cannot be precluded.
But it is probable that either the Conservatives or Liberals will back down. The capitalist press has almost universally condemned the Conservative maneuver over party financing as an ill-conceived and transparent political power-play.
The Liberal party is mired in crisis—a crisis rooted in corporate Canada's strong support for the Harper government—and is in the midst of changing leaders. Menu Search. Latest Profile.
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