Mr. Chair, if we add those numbers up, that is $2 billion in Liberal-initiated spending primarily on their platform commitments as I mentioned. I wanted to finish those comments off.
I would like to make some more comments about another part of the discussion tonight and it has to do with forecasting. After those comments I would like to move on to my questions and I will indicate to you, Mr. Chair, when I get to those questions.
Under successive Liberal and Conservative governments, private sector economists have been consulted on their forecasts for the economy and the average of those forecasts is used as budget baselines. Here is the advice the minister received from his own officials in the briefing binder he received in November:
“The department regularly surveys about 15 private sector forecasters for their views on main economic variables. The average of these private sector forecasts then forms the basis for the economic assumptions used for fiscal planning in the budget and the fall update. This practice has been used since 1994 and introduces an element of independence into the fiscal forecast. It has been strongly supported by external organizations such as the International Monetary Fund and we recommend you maintain this practice.”
Apparently the finance minister did not agree and instead he decided to politicize this important process for his own political benefit.
In his budget the minister used a base oil price of just $25 per barrel for 2016 and real GDP growth of just 1%. This has the effect of lowering expected tax revenues by $6 billion. Previous governments generally have used a figure between $1 billion and $3 billion. He calls it prudence, but at the finance committee one PBO official likened it to assuming oil prices would only go negative. Its report said that such a large arbitrary deviation from private sector forecasts would remove independence from the process. By the way, those average sector forecasts were $40 a barrel in 2016 and they expected our growth rate to be just around 1.4%.
Instead, it appears the finance minister has given himself a $6 billion slush fund to play with. This is very concerning. In every one of the next five years the government can spend $6 billion more than was outlined in the budget and still meet its deficit targets. This is not a conspiracy theory. A recent BMO report shows that the Ontario Liberals have been using this strategy for years to hide spending. The process of forecasting is fundamental to our budget process and it is important for Canadians to understand how the Liberals are politicizing it and undermining the credibility of the finance department.
I will now move on to my questions.
Why did the department make such an unusually large downward adjustment to the private sector forecast? Was this a decision by the minister himself, or who recommended it?
