Balancing books

Balancing the books is a challenge for a business, so you can imagine how difficult it would be for a country.

But the Conservative government seems serious about doing just that. The country is staring down a $25 billion dollar deficit, and while the government said it might be a bit later than hoped to correct the situation, it appears serious about making it happen.

The government is committed to balancing the books by 2015. Low taxes and increased trade, while looking for opportunities to cut spending, are some of the tactics it plans to use to achieve the goal.

Meanwhile, the provinces have their own stories, and not all of them are positive. Take New Brunswick for example; it has a growing deficit and because of economy woes, it’s looking at a $356 million shortfall according to a report from the CBC.

That’s a far cry from the projected deficit of $183 million tabled in the March budget. And of course there’s Ontario, with reports pointing to a huge deficit of $15.2 billion. That’s a bigger shortfall than all of the other provinces put together.

There’s been much media attention on this situation, and Ontario is hoping to get things under control by introducing wage freezes to public sector employees (teachers). Premier Dalton McGuinty has said in an open letter that the government plans to balance Ontario’s books by 2017-2018. However, in a less than graceful move, he resigned last fall and left us a mess. We will be watching the new premier Kathleen Wynne, who has just been voted in by her party friends to fill the gap. While that one is not hard to fill given her predecessor’s weak performance, it is to be seen if she can fill the gap in Ontario’s financing as well.

Perhaps somewhat surprisingly, Saskatchewan claims to be the only province that will have a balanced budget in 2012-2013, thanks to a growing population and economy.

The federal government does have an equalization program in place to help out struggling provincial governments. There were six provinces expected to receive a total of $16.1 million in equalization payments in 2013-2014; P.E.I, Nova Scotia, New Brunswick, Quebec, Ontario, and Manitoba.

However, it’s imperative for the provinces to watch their books so the taxpayer doesn’t take a hit, and provincial services remain intact. The provinces could take a page from the federal government’s book on this one.