The Annual Budget: Drunken Sailors on the Loose

The presentations of annual budgets by governments, irrespective of partisan stripe, often resembles the preparations made by sailors before “putting to port” after a prolonged period at sea. The Coureurs de Bois, who brought their products to Montreal after a long Canadian winter caring for their traps could attest to the same experiences when they “hit the bars”.

A lot of work tossed to the wind. Their hard-earned money “flew out the window”. Domenico Modugno – yes, he of Volare fame – laid it out in one of his songs: Marinai, Donne e Guai. Drunken sailors tend to be intemperate.

Increasingly, Governments are choosing them as role model when it comes to estimating expenditure plans. Yesterday, the Federal Government revealed a plan that would add to a current debt load of $1.223 trillion (Taxpayers’ Federation, Debt Clock). It did not offer a plan to retire that debt. That suggests it now longer shares what may in the Diaspora [once] believed was a Canadian dream: you can buy a house; pay off the mortgage and “save for a rainy day”.

By the way, each one of us owes $31,000.00 as a share of that mortgage. Now back to the Budget Estimates tabled yesterday. They were first and foremost an indication of whether the government could, reasonably, spend more and for what “politically legitimate” purpose.

It decided to spend $53 billion more than it is likely to collect in taxes. That, after it raised taxes to justify its expenditure plan. As per figure1 (the graphic above), derived from the Report of the Parliamentary Budget Office, more than 63% is Statutory spending, which has already been authorized (i.e.., seniors’ pensions, transfers to other governments and institutions). The balance, roughly 37% (including the $53 billion), is new and requires approval of the House of Commons.

Over the last month, Ministers have travelled the country seeding monies “for this or that”; the suggestion being that we have the money. We do not. The budget presentation represents the actual costs already paid and estimates of costs for “new” programs. Are any of these “new” programs worth their while? It depends on your attachment to the lobby groups associated with their advancement. And, whether you think you are or could be better off as a result.

For example, since last week, the cost to deliver every copy of our paper to our subscribers increased by 17%, thanks to some of the energy-related budget measures. The same increase in per litre cost for the gasoline to charge my motor vehicle means that I will do much more walking to get to work. Good for me, I guess. I can sing along with Modugno.