Hundreds of cellphones were raised in the air Saturday, Dec. 2, 2017, as supporters tried to capture a picture of Prime Minister Justin Trudeau as he made his rounds at Semiahmoo Secondary. (Aaron Hinks photo)

PBO sets budget baseline for campaign vows with tools, deficit projections

Parliament’s spending watchdog estimates that federal books will be in the red by $20.7 billion this year

Parliament’s spending watchdog is predicting years of deficits deeper than the government has laid out.

The numbers are in a report the parliamentary budget office says should set the baseline for the campaign promises parties will dangle in front of voters this fall.

WATCH: Five highlights in the 2019 federal budget

The PBO estimates that federal books will be in the red by $20.7 billion this year and bottom out at a deficit of $23.3 billion the year after, before improving to a $12.5-billion deficit by 2022.

The numbers are better than the PBO predicted in April but worse than the figures in Finance Minister Bill Morneau’s pre-election budget that forecast deficits between $19.8 billion and $12.1 billion.

The estimates and a new online costing tool are part of PBO efforts to prepare for its role as an independent auditor of each party’s spending plans in the upcoming election campaign. The watchdog office plans to post cost estimates of campaign promises as the parties announce them before and during the campaign.

The report is likely to make it more difficult for any party to cook its own projections and also makes it difficult for any party to promise a quick return to balanced budgets.

Still, the PBO offers one possibility for making up some of the shortfall in a separate report detailing how much the government loses to tax evasion, to overseas tax havens, and through tax avoidance through legal loopholes that contravene the spirit of income-tax laws.

The difference between what is collected and what could be collected absent tax-evasion schemes is known as the “tax gap.”

The Canada Revenue Agency, in a report earlier in the week, pegged the lost take in federal corporate income taxes in 2014 at between $9.4 billion and $11.4 billion. But by looking at electronic transfers into and out of Canada, as well as special tax filings, the budget office gives a “hypothetical” estimate that $25 billion might have been lost in corporate tax revenue.

What the PBO was more certain of is that money flowing between Canada and countries known to be tax havens was “disproportionately large.”

“One thing is clear — we need greater transparency on corporate finances and financial flows, including who owns what companies,” said Toby Sanger, executive director of Canadians for Tax Fairness, in a statement.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Oyster Bay Microtel solidifies reputation as a Vancouver Island destination

The Microtel is focused on continuing to build their reputation over the summer

Charity the name of the game for Crofton slo-pitch tournament participants

Crofton Fire Department event benefits three recipients

LRCA Concerts in the Park series presents: Cheryl Bear

Bear is an accomplished singer songwriter, and has travelled to over 600 Indigenous communities

Ladysmith bodybuilder wins big at VI Showdown

VI Showdown is an annual event for fitness, figure, physique, bodybuilding, and bikini competition

Federation of Labour supports striking forestry workers

Calls for a “hot edict” on Western Forest Products

‘Bad choices make good stories’: Margaret Trudeau brings her show to Just for Laughs

Trudeau says over the decades she has been suicidal, manic, depressed

VIDEO: Wolf spotted swimming ashore on northern Vancouver Island

Island wolf population estimated at under 150 in 2008, says VI-Wilds

Diversity a Canadian strength, Trudeau says of Trump tweets at congresswomen

Trudeau avoided using Trump’s name when he was asked about the president’s Twitter comments

Garneau ‘disappointed’ in airlines’ move against new passenger bill of rights

New rules codified compensation for lost luggage, overbooked flights

Mercury tops out on top of the world: Alert in Nunavut warmer than Victoria

It’s the latest anomaly in what’s been a long, hot summer across the Arctic

Canadian is detained in China on drug allegations: Chinese government

Detention of a Canadian in China comes as part a diplomatic dispute triggered by arrest of Huawei exec Meng Wanzhou

Rare white ravens spotted again in mid-Island

Nature photographer Mike Yip said mysterious birds back in Coombs area

CO’s call off efforts to trap bear who attacked North Island man

Woss man recuperating after incident on remote logging road

Too much time on social media can hurt teens’ mental health: study

Researchers conducted a four-year survey of more than 3,800 adolescents between Grades 7 and 11

Most Read