Budget Watchdog takes aim at long term fiscal health
The battle between the federal government and the Parliamentary Budget Office continued this week after the watchdog group issued a report that said the fiscal health of the federal and provincial governments is unsustainable over the long term. Kevin Page, Canada's Parliamentary Budget Officer, talks to BNN about what the federal government needs to do to keep its fiscal house in order.
“We know now that we are in the midst…of a significant demographic transition,” he tells BNN. “That means less labour input, slower economic growth and that will put pressure on output, on government revenues and government spending.”
Page says that while the federal government has promised to cuts costs and tame the deficit, they are cutting in the wrong areas.
“When you look at the first quarter and look at spending…we see increases in operational spending and we see decreases in capital spending,” he says. “The lesson learned in the late 1990s is that if we’re looking for durable spending restraint, you don’t get that through capital as you eventually have to put that money back.”