Business and Labour concerned about coming Federal Cuts.

Conservatives will always use deficit reduction as a rationale for cutting entitlement spending. Many business groups however often applaud such cuts. In the case of St. John's it probably worries because it may receive considerable help from Ottawa. Milton Friedman the former guru of free market ideology claimed that contrary to many conservatives deficits could be positive because they provide a justification for cutting out government entitlement programs. We are likely to see this in coming years whether Harper stays in power or Ignatieff miraculously gets elected. This is from vocm.

Business and Labour Concerned Federal Cuts Coming



The St. John's Board of Trade is raising concerns after recent comments from the Prime Minister. Stephen Harper has indicated the federal deficit will decrease because there will be a reduction in growth in spending. Board of Trade Chair Bruce Templeton says the federal government's track record isn't comforting. He says in less than 10 years, the federal government's expenses will have increased by almost a third. Templeton says that it looks like the federal government will have to cut programs and services just to balance budgets and he's concerned how that will affect this province.



The Public Service Alliance of Canada says it is quite concerned that federal government jobs could be cut if the Conservatives form a majority government in the next election. Spokesman Larry Welsh says government is currently running a significant deficit and he fears that could spell trouble.

Ottawa to bleed 64 billion over two years

The Conservatives have jettisoned the whole idea of balanced budgets for the next few years at least. After two years of hard times under the Conservatives if they last that long no doubt any majority if there is one will go to the Liberals. Unless Harper has a death wish I imagine the upcoming budget will have enough in it to mollify Liberals and result in the budget passing. Ignatieff has no relish for a coalition or a possible election at this time. However it may be difficult for the Conservatives to retain power after presiding during an economic downturn.
Hard right economics and constant criticising of government intervention seems to have gone into the dustbin of history at least for a while. It will be dusted off as soon as things rebound a bit and touted as an obvious truth again.

Ottawa to bleed $64-billion over two years
STEVEN CHASE
Globe and Mail Update
January 22, 2009 at 3:07 PM EST
OTTAWA — The Harper government will run deficits over the next two years totalling $64-billion, a top official announced yesterday, also acknowledging it will take up to five years to return to balanced budgets.
A senior official said the Tories expect to run a $34-billion deficit in the fiscal year starting April 1 and a $30-billion shortfall in the year after. “At that point we will see deficits diminish and we forecast a return to surplus within five years.”
The Conservatives appear to be releasing projected deficit figures ahead of time to ensure the focus shifts to the stimulus spending measures when they release their budget on Jan. 27.
Outside forecasters have beat the government to the punch in recent weeks in delivering the gloomy news about Ottawa's fiscal future.

Last week, parliamentary budget watchdog Kevin Page predicted in The Globe and Mail that the government would plunge into deficit for at least five years. On Wednesday, senior Canadian economist Dale Orr predicted it would take six years to return to balanced budgets.