Auditor’s report casts doubt on Thomson’s balanced budget claim, Liberals charge

OTTAWA — Tom Mulcair has been showcasing former Saskatchewan finance minister Andrew Thomson as proof that New Democrats know how to balance budgets but Liberals are pointing to a provincial auditor’s report to say he actually ran deficits.

In a 2013 special report, Saskatchewan’s then auditor, Bonnie Lysyk, said if proper accounting standards had been followed, the province would have presented deficit budgets in nine out of the previous 10 years, despite government claims to have balanced the books each year.

According to a chart in her report, that included deficits of $253 million and $310 million in the 2006 and 2007 budgets presided over by Thomson, who is now running for the federal NDP against Conservative Finance Minister Joe Oliver in the Toronto riding of Eglinton-Lawrence.

However, New Democrats say Lysyk was referring to projected budgets and they point to another chart in her report which they say shows Thomson managed to do better than projected, actually producing surpluses in both years.

“The auditor identifies that in the report, that in those years on a summary financial statement basis, there was a substantial surplus in both those years,” Thomson told a news conference Thursday, putting the surplus at $600 million in his first year and $1.9 billion in his second.

“It has to do with accounting and presentation initially.”

Lysyk, who is now Ontario’s auditor general, declined to comment on which party is reading her report correctly.

Lysyk’s report resurfaced as New Democrats and Liberals snipe at one another over the quality of economic advice their respective leaders are receiving in preparation for tonight’s debate on economic issues.

In the report, Lysyk said successive Saskatchewan governments of varying party stripes have made it a practice to issue two sets of books each year.

While both are publicly available, she said the government focuses on the one that includes only a portion of the government’s financial activities and which can easily be manipulated “to portray whichever financial picture the government would like.”

If Saskatchewan issued only one set of books that included the entire government’s financial activities — following the same “summary” accounting procedure that is “standard” in every other province and the federal government — Lysyk said, “It would actually have presented deficit budgets instead of ‘balanced budgets’ in nine out of the last 10 years.”

Lysyk’s two-year-old report is not the only piece of the past that has resurfaced as Liberals and New Democrats attempt to cast doubt on the economic savvy of their leaders’ advisers.

The NDP is circulating a video of Toronto incumbent Chrystia Freeland, co-chairwoman of Justin Trudeau’s economic advisory council, arguing against a U.S. government bailout of the auto industry during the deep recession of 2008. Freeland was a journalist at the time.

New Democrats have used a clip from that video in an online ad that concludes: “If Liberals don’t fight for Canadian jobs before they’re elected, they definitely won’t fight for them if they win.”

The NDP has also dredged up a number of quotes attributed to one of Trudeau’s economic stars in Quebec, Jean-Yves Duclos, among them a statement in which he suggests infrastructure investments do little to stimulate the economy, that they “may give the impression that politicians are taking action but almost inevitably lead to the wasting of precious public funds.”

That’s at odds with Trudeau’s plan to almost double infrastructure funding to stimulate the stagnant economy, running up modest deficits for three years in the process.

The NDP has also taken aim at Toronto Liberal candidate Bill Morneau, touted as a potential finance minister in a Trudeau government. New Democrats note that it was Morneau’s human resources company, Morneau Shepell, that informed devastated retirees of insolvent Nortel Networks in 2011 that they faced a big cut in their pension income.

Liberal incumbent John McCallum, a former bank economist, counters that Freeland was arguing for “a structured bankruptcy for the auto sector as a way to save jobs” and that Duclos’ academic studies and research papers are being taken out of context.

As for Morneau, McCallum says his company was hired to manage disbursement of Nortel pension benefits and it wasn’t his fault that the failed company’s pension fund was depleted.

Joan Bryden , The Canadian Press