Today's Fiscal Monitor points out that regardless of how hard we try, the Canadian economy/tax system refuses to generate a budget deficit.
For the first quarter of fiscal 2007-08, the budget surplus is already standing at $6.4bn. That's substantial, and in spite of the fact that program expenditure was up 7.6% relative to last year's first fiscal quarter.
I'm starting to become seriously concerned that politicians are starting to look at the budget as the well that never runs dry. The NDP already does. Just because we're doing well isn't reason not to attack the budget directly through fewer taxes and judicious cuts where needed. This isn't a call for a spending freeze or anything, but the budget is constantly evolving, and should be added to and pruned on a regular basis. I am forced to think that the succession of large surpluses created over the last few years, the idea of monitoring the budget for waste is increasingly scarce.
Also, the projection for GDP inflation jumped from 2.7% from 1.5%! That is, um, large. Especially since the 1.5% number is only three months old. I would like to know the determinants of this change, but 1.5% is obviously too low. 2.7% is worringly high, though. Real growth also earned a nudge from 2.3% to 2.5%.