Party leaders have been quick to react to Monday’s announcement from Finance Canada, that the country has posted a $1.9-billion surplus.
It’s a stark contrast from the $2-billion deficit expected for 2014-2015.
But Liberal leader Justin Trudeau says it’s a surplus gained on the backs of billions of dollars in program underspending.
How True Is It?
Watch Liberal Party of Canada Leader Justin Trudeau speak about the budget surplus:
Mulcair says that Harper's budget cuts are "good news for Canadians". He's wrong. Those cuts came as we headed into recession. Canadians are struggling. We need investment to help people and grow the economy, not more cuts.Posted by Liberal Party of Canada | Parti libéral du Canada on Tuesday, September 15, 2015
Planned “lapsed” spending
Justin Trudeau’s attacks have been deliberate, saying Canada is not growing its economy.
“We saw Mr. Harper underspending and making cuts, so he could balance the books in time for his election.”
Trudeau is pointing to $8.7-billion unspent by the Conservatives last year.
But a spokesperson for Finance Canada says $7.2-billion in lapsed spending was expected in April.
A further $1.5-billion reduction in “direct program expenses” was reported on Monday.
Underspending not new
A closer look at Finance Canada’s numbers shows, aside from it being expected, lapsed spending is a trend that has been happening for more than a decade.
It was even happening during Liberal governments, under Paul Martin.
It’s also expected to continue.
Surplus from underspending alone?
To go from a $2-billion deficit to a $1.9-billion surplus, Finance Canada needed to find $3.9-billion dollars it was not expecting in April.
Only $1.5-billion of that difference came from lapsed program spending.
A much larger chunk of that came from taxation.
In particular, $1.5-billion from increased revenue from personal income tax, and another $1.5-billion from corporate tax revenues.
It should also be noted the Conservatives spent more than expected, handing out $800-million extra in transfers to the elderly, unemployed and children.