Former Parliamentary Budget Officer Kevin Page has weighed in on the budget:
Budget 2022 is surprisingly measured, modest and responsible.
Many budget observers had early expectations and concerns about a big- spending budget financed largely through higher deficits. These expectations were fueled by the recent Liberal-NDP agreement on priorities and policies, as well as pressures to increase defence spending towards NATO targets. In the current environment, more deficit spending focused on boosting consumption (demand) versus investment (supply) would add to inflation.
Business leaders raised concerns that the Liberal Party did not give enough focus to a growth agenda in its 2021 election platform. The economy needs to grow to raise revenues to pay for improved social supports.
To give credit where credit is due, the Liberal government put together a fiscal strategy that largely addresses these concerns. Planned budgetary deficits and the debt-to-GDP ratio are reduced relative to the Fall 2021 Economic and Fiscal Update. New spending is limited. Efforts to address growth and affordability are more focused on the medium-term, with policies aimed at increasing supply (e.g. housing stock) and longer term growth (e.g., innovation, green economy).
Households and businesses looking for significant new short-term relief on recent and expected rising cost pressures will largely be disappointed. Fiscal responsibility is not politically easy.
The fiscal contours of Budget 2022 are measured and in proportion. From above, they look deliberately shaped as a tailor would cut cloth for a suit or dress.
These are trying and uncertain times. Events could render this budget a pipe dream. But, for the moment, Page believes it fits the bill.
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