NEWS

Why Canada needs a balanced budget law

Joe Oliver

“Balancing the budget,” a former U.S. Congressman once mused, “is like going to heaven: Everybody wants to do it, but nobody wants to do what you have to do to get there.”

But do it we must. Canadians expect their government to spend within its means. After all, government cannot indefinitely spend more than it earns. Nor can it tax its way to prosperity.

Balanced budgets help us keep taxes low, protect our top credit rating, maintain consumer and investor confidence, preserve funding for health care and education, keep Canada strong in the event of an international shock and avoid saddling our children with our debts.

Families understand that. They have to find savings and make every penny count. Parents understand that the reward of responsible budgeting is worth it, for them and their kids.

Our Conservative government understands that too.

That is why, on top of balancing the budget this year, we are introducing balanced budget legislation.

Under this bill, the only acceptable deficit would be one that responds to a recession or extraordinary circumstance, like a war or natural disaster, that has a cost to our government of over $3 billion.

We understand there are times when stimulus may be called for. The proposed bill would acknowledge the potential need for deficits to counter economic decline.

Within 30 days of a published deficit, the finance minister would be required to testify before the House of Commons Committee on Finance and present a plan with concrete timelines to return to balanced budgets. That plan would include a freeze on operating spending and a wage freeze for cabinet ministers and deputy ministers.

If a finance minister posts a deficit outside of these extraordinary circumstances, personal discipline would be imposed. Salaries of cabinet ministers and deputy ministers would be reduced by 5 percent until a return to balanced budgets is achieved.
Balanced budget legislation is about providing a disincentive for governments to act irresponsibly. It is about making sure Canada continues down the right course — the only path that will create jobs, growth and long-term prosperity.

It will work in the interests of our children and our grandchildren. It will achieve a more prosperous and secure Canada by ensuring that Canadian families keep more of their hard-earned dollars in their pockets, to spend on their priorities.