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The only real surprise is just how quickly it happened.

With their promise to cap the deficit safely in the rearview mirror, the question becomes how long the Liberals will be running them. Will their promise to balance the budget in time for the next election be the next one to fall by the wayside? All indications are that it will, given the new Liberal “fiscal anchor” of shrinking the net-debt-to-GDP ratio, rather than actually balancing the budget. Conveniently, this would allow them to spend as much as $25 billion a year more than they take in. That’s a pretty convenient “anchor.” It sounds like someone already dropped it through the hull of the ship.

In explaining his shift in position, Prime Minister Trudeau stated he “hopes for modest deficits.” We think Canadians deserve more than just a hope and a wish. They deserve a plan, because Canadians know you can’t wish away a deficit, and budgets don’t, in fact, balance themselves.

This deficit spree would be more palatable if there was any indication of what it might do to create jobs and growth. But so far, the Liberal fiscal approach has been simply to set the stage for blowing through their targets, with no explanation of how this spending will help to grow the economy. If these deficit plans simply saddle Canadians with billions of dollars of new program spending, the economic effect is likely to be negligible — but the structural deficit left behind certainly won’t be.

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