{"id":264027,"date":"2016-03-21T19:22:46","date_gmt":"2016-03-21T23:22:46","guid":{"rendered":"https:\/\/policyoptions.irpp.org\/issues\/what-we-should-ignore-in-budget-2016\/"},"modified":"2025-10-07T21:07:26","modified_gmt":"2025-10-08T01:07:26","slug":"what-we-should-ignore-in-budget-2016","status":"publish","type":"issues","link":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/","title":{"rendered":"What we should ignore in Budget 2016"},"content":{"rendered":"

My last post<\/a> on Policy Options Perspectives described what I\u2019ll be looking for in Budget 2016, including things like budget transparency, prudence, clear fiscal policy targets and a better sense of key policy priorities.<\/p>\n

This article explains something I\u2019m not <\/em>focused on in the budget \u2014 the projected budget balance in a given year. This commonly raises preoccupations like, \u201cDid the Conservatives leave the Liberals a surplus or not? Will the deficit be larger than $30 billion next year? And will the government balance the books by 2019?\u201d<\/p>\n

Headline deficit numbers matter, of course, but on their own they are an incomplete story, as John Geddes of Maclean\u2019s<\/em> magazine explained in this recent interview<\/a>:<\/p>\n

\u201cSometimes we talk about deficit and stimulus as though it\u2019s the same thing. It really isn\u2019t the same thing. Some of the deficit is just because revenues are coming in more slowly. That can\u2019t really be seen as stimulus\u201d<\/em><\/p>\n

So allow me to steal a phrase that Prime Minister Justin Trudeau used during one of the 2015 election debates, \u201cA deficit is NOT<\/u> a deficit, is NOT<\/u> a deficit.\u201d<\/p>\n

What matters, in other words, is the reason for the deficit. Consider three contributing factors: the worsening economic outlook, new fiscal measures introduced by the government, and forecast prudence (the extra padding you factor into the budget, in case things go south).<\/p>\n

Here are two theoretical scenarios to show why it\u2019s important to drill down into the factors behind a deficit:<\/p>\n

\"Tapp_Budget_2016_final-fig\"<\/a><\/p>\n

In scenario A, one-third of the deficit is due to each of the factors. The cost of new measures for the upcoming fiscal year is similar to what the Liberals forecast in their election platform (roughly $10 billion). So the fiscal adjustment (relative to expectations based on the government\u2019s last fiscal update) largely reflects some extra prudence they\u2019ve factored into the budget. There\u2019s no real change of plan from what they promised during the election campaign. They\u2019re just being more cautious, so in all likelihood, the government would eventually better its deficit target.<\/p>\n

In scenario B, the economic adjustment due to external factors \u2014 such as weaker oil prices \u2014 is smaller, but the government\u2019s reaction through new fiscal measures is stronger. This scenario also has the government acting less cautiously \u2013 no additional prudence has been factored in. In this scenario, it looks like the Liberals are doing more than they promised in the election.<\/p>\n

But is this because they underestimated the cost of their election promises and have updated their estimates, or is it because they\u2019re actually doing more? Importantly, are these new measures temporary or permanent, and does the budget include higher taxes to fund the permanent part? These questions are pertinent because they help us assess whether the government\u2019s measures might make it harder in the long run to eliminate the deficit.<\/p>\n

Not all deficits are created equal. And in Budget 2016, in particular, we need to look beyond the headline deficit numbers. If we can figure out what\u2019s driving them, we\u2019ll get a much more complete picture of what\u2019s going on.<\/p>\n","protected":false},"excerpt":{"rendered":"

My last post on Policy Options Perspectives described what I\u2019ll be looking for in Budget 2016, including things like budget transparency, prudence, clear fiscal policy targets and a better sense of key policy priorities. This article explains something I\u2019m not focused on in the budget \u2014 the projected budget balance in a given year. This […]<\/p>\n","protected":false},"featured_media":236712,"template":"","meta":{"_acf_changed":false,"content-type":"","ep_exclude_from_search":false,"apple_news_api_created_at":"2025-10-08T01:07:28Z","apple_news_api_id":"32b70246-34e7-4326-9f7b-4ac8137eabad","apple_news_api_modified_at":"2025-10-08T01:07:28Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/AMrcCRjTnQyafe0rIE36rrQ","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false},"categories":[9362,9358],"tags":[9132],"article-status":[],"irpp-category":[4245,4295],"section":[],"irpp-tag":[],"class_list":["post-264027","issues","type-issues","status-publish","has-post-thumbnail","hentry","category-economie","category-politique","tag-politique-canadienne","irpp-category-economie","irpp-category-politique"],"acf":[],"apple_news_notices":[],"yoast_head":"\nWhat we should ignore in Budget 2016<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/\" \/>\n<meta property=\"og:locale\" content=\"fr_FR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What we should ignore in Budget 2016\" \/>\n<meta property=\"og:description\" content=\"My last post on Policy Options Perspectives described what I\u2019ll be looking for in Budget 2016, including things like budget transparency, prudence, clear fiscal policy targets and a better sense of key policy priorities. This article explains something I\u2019m not focused on in the budget \u2014 the projected budget balance in a given year. This […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/\" \/>\n<meta property=\"og:site_name\" content=\"Policy Options\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/IRPP.org\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-08T01:07:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png\" \/>\n\t<meta property=\"og:image:width\" content=\"915\" \/>\n\t<meta property=\"og:image:height\" content=\"667\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@irpp\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/\",\"url\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/\",\"name\":\"What we should ignore in Budget 2016\",\"isPartOf\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png\",\"datePublished\":\"2016-03-21T23:22:46+00:00\",\"dateModified\":\"2025-10-08T01:07:26+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#breadcrumb\"},\"inLanguage\":\"fr-FR\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"fr-FR\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#primaryimage\",\"url\":\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png\",\"contentUrl\":\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png\",\"width\":915,\"height\":667},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/policyoptions.irpp.org\/fr\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What we should ignore in Budget 2016\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/#website\",\"url\":\"https:\/\/policyoptions.irpp.org\/fr\/\",\"name\":\"Policy Options\",\"description\":\"Institute for Research on Public Policy\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/policyoptions.irpp.org\/fr\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"fr-FR\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What we should ignore in Budget 2016","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/","og_locale":"fr_FR","og_type":"article","og_title":"What we should ignore in Budget 2016","og_description":"My last post on Policy Options Perspectives described what I\u2019ll be looking for in Budget 2016, including things like budget transparency, prudence, clear fiscal policy targets and a better sense of key policy priorities. This article explains something I\u2019m not focused on in the budget \u2014 the projected budget balance in a given year. This […]","og_url":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/","og_site_name":"Policy Options","article_publisher":"https:\/\/www.facebook.com\/IRPP.org","article_modified_time":"2025-10-08T01:07:26+00:00","og_image":[{"width":915,"height":667,"url":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png","type":"image\/png"}],"twitter_card":"summary_large_image","twitter_site":"@irpp","twitter_misc":{"Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/","url":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/","name":"What we should ignore in Budget 2016","isPartOf":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/#website"},"primaryImageOfPage":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#primaryimage"},"image":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#primaryimage"},"thumbnailUrl":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png","datePublished":"2016-03-21T23:22:46+00:00","dateModified":"2025-10-08T01:07:26+00:00","breadcrumb":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#breadcrumb"},"inLanguage":"fr-FR","potentialAction":[{"@type":"ReadAction","target":["https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/"]}]},{"@type":"ImageObject","inLanguage":"fr-FR","@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#primaryimage","url":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png","contentUrl":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Tapp_Budget_2016_final-fig.png","width":915,"height":667},{"@type":"BreadcrumbList","@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/03\/what-we-should-ignore-in-budget-2016\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/policyoptions.irpp.org\/fr\/"},{"@type":"ListItem","position":2,"name":"What we should ignore in Budget 2016"}]},{"@type":"WebSite","@id":"https:\/\/policyoptions.irpp.org\/fr\/#website","url":"https:\/\/policyoptions.irpp.org\/fr\/","name":"Policy Options","description":"Institute for Research on Public Policy","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/policyoptions.irpp.org\/fr\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"fr-FR"}]}},"_links":{"self":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/issues\/264027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/issues"}],"about":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/types\/issues"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/media\/236712"}],"wp:attachment":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/media?parent=264027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/categories?post=264027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/tags?post=264027"},{"taxonomy":"article-status","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/article-status?post=264027"},{"taxonomy":"irpp-category","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/irpp-category?post=264027"},{"taxonomy":"section","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/section?post=264027"},{"taxonomy":"irpp-tag","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/irpp-tag?post=264027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}