"The budget will balance itself"

Prime Minister Justin Trudeau has been mercilessly mocked for his claim way back in 2014 that "the budget will balance itself". It's an unfair criticism inasmuch as the offending phrase was the last part of a longer quote that's pure Keynesian logic:  "the commitment needs to be a commitment to grow the economy and the budget will balance itself".  Any politician who has tried to balance a budget through austerity -- we're looking at you, David Cameron, among many others -- would probably agree with the sentiment.

But never mind the theory, because right now in Canada, guess what's been happening? With the economy growing and the jobs market strong, revenues are soaring, even as the costs of COVID measures fall rapidly away. As a result, so far in fiscal 2022/23 (which began in April), the Federal budget is in surplus!  You can read all about it in the Fiscal Monitor, here. 

Now, it's true that the earlier months of Canada's fiscal years tend to produce smaller deficits than the later months. It's also true that the Government may well find itself tempted to spend some of this supposed windfall.  And there are signs that the economy is slowing down, even though it's not yet in a recession. So it's unlikely that Canada will end the fiscal year in surplus. Still, the recent data seem to support Trudeau's statement -- the full version of it, that is, not the five words that his opponents always focus on. We shouldn't expect Tory leader Pierre Poilievre to apologize or anything, but it would be nice to think someone has quietly brought this to his attention.

And by the way, it's not just the Federal finances that are improving. Oil producing provinces such as Alberta and Saskatchewan are rolling in dough. Even energy-poor Ontario racked up a small surplus in its last fiscal year. You're not reading much about all this in the media,  maybe because governments are feeling a bit sheepish about making out like bandits at a time when many Canadians are feeling the pinch.