Combined government surplus hits $ 29 billion

June 15, 2007

The combined surplus of the three levels of government in Canada plus the CPP and QPP pension plans has hit 29 billion dollars or close to 2% of the GDP.In other words they have taxed 29 billion dollars more than they have spent.The biggest culprit after the federal government at 11 billion is the Alberta government whose surplus is 8.7 billion dollars.B.C. ran a surplus of 600 million dollars. Ontario ran a 365 milion dollar surplus while Québec ran a 2.5 billion dollar deficit. (See Statistics Canada Daily June 14, 2007)

Last year 2006 the consolidated combined surplus was 28 billion dollars. We are definitely not short of tax revenues to fix problems if in two years we built a surplus of almost 60 billion dollars !

This result plus the Bank of Canada's insistence on raising interest rates can only have a contractionary impact upon overall aggregate demand in the country. It will also reinforce a shortage of good quality government debt instruments .

The current neglect of infrastructure is all the more appalling in the light of these surpluses which show that there is plenty of tax money to fix most of our problems. If the Governments refuse to spend and invest the money where it is needed they should cut the level of taxation . The shell game of claiming that there is no money to make things better has gone on for far too long