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Reevely: Subtracting when they should have added makes NDP's financial forecasts wrongly rosy

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Ontario New Democrat Leader Andrea Horwath speaks at a rally in Paris, Ont., on Tuesday, May 15, 2018.


Colin Perkel / THE CANADIAN PRESS

The Ontario New Democrats’ budget plan understates the deficits they’d run by $1.4 billion a year because it counts a $700-million expense as government revenue.

This isn’t buried in footnotes. It isn’t the obscure error the Liberals crowed about earlier this week in declarations that were about 85 per cent bull. 

This is in bold type on page 97 of the NDP platform, in the very final calculation. The hard stuff is done by then. Lines and lines of pricing out the party’s plans for what it would do if leader Andrea Horwath becomes premier after the June 7 election are soaring to their triumphant finish. And then the math zigs when it’s supposed to zag.

This year, an NDP government would take in $153.6 billion and spend $157.6 billion. The difference is $4 billion of red ink — a lot of money, but less than the Liberals would need. Then the New Democrats allow for a “reserve” of $700 million, a margin of error in case unexpected things come up.

But instead of adding the reserve to their deficit and coming up with a total of $4.7 billion, they subtract it to get $3.3 billion.

The NDP platform does the same thing every year for the five years it looks ahead. By the end of a full term, the party platform says a New Democrat government would be running a deficit of $2 billion when it should be $3.4 billion.

(We can only see this because the party went to such trouble to produce a costed platform and share it early. That’s worth something. The Progressive Conservatives have no such document so nobody knows what their budgets would look like. Possibly not even they do.)


A section of the Ontario NDP platform counts money set aside for unexpected expenses as a revenue source.

Ontario governments have to include reserves in their budgets, under a 2004 law the Liberals passed to show how good they were going to be with the treasury.

“The fiscal plan must include a reserve to provide for unexpected adverse changes in revenues and expenses, in whole or in part,” the Fiscal Transparency and Accountability Act says.

The law doesn’t say how big the reserve has to be. There’s no formula. As finance minister, the Liberals’ Charles Sousa has plugged anything from $600 million to $1.1 billion as reserves into his budgets, depending on both genuine prudence and on political calculations about what bottom-line figures the Liberals wanted to show off.

The thing is, the reserve has to be booked as an expense. If you get to the end of the year and you haven’t spent it, you get to treat it as found money. Spend it, talk about all the money you saved because you’re such great managers, or a bit of both. But when you’re making up your budget, the reserve is money you’re ready to spend if you have to.

The cash might flow out. It would never flow in.


An excerpt from the 2018 Ontario budget, prepared by the Liberals, shows their $700-million reserve making the province’s bottom line look worse.

Sousa’s pre-election budget included $700-million reserves for each upcoming year, just like the New Democrats’ platform, but the Liberals did what they’re supposed to do with it: their plan says they’ll spend $6 billion more than they bring in, and then they added $700 million of reserve to the deficit for a total of $6.7 billion.

The New Democrats use the same number but they do the opposite.

“The key difference is the Liberals assume they’ll spend the reserve and we assume we won’t,” explains NDP campaign spokesperson Andrew Schwab. “Which is why we make the assumption we’ll use it to pay down the deficit.

“The Liberals have assumed that they will spend their $700-million reserve on unspecified in-year expenses annually, above and beyond what they’ve budgeted.

“Given we’re facing an operational deficit, it’s our intention not to spend the reserve, and instead use it to pay down the deficit … something the government often does in practice, anyway.”

Ten out of 10 for effort.

That’s an OK argument for not including a reserve in your calculations (as the Progressive Conservatives did when making up their defunct “People’s Guarantee” platform under ex-leader Patrick Brown). That’ll be a problem when you form a government and run into the law that says you have to have a reserve, but it’s a position a party could defend.

It is not an argument for including a reserve but treating it as income rather than spending. If you could do that, you could stick a $1-billion reserve into your plan and cut your deficit by $1 billion. Or $4 billion. Or $20 billion.

“It is a mistake,” says Kevin Page, the former federal parliamentary budget officer turned scholar at the University of Ottawa, after being shown the numbers by email. “Looks like a spreadsheet type of error. If they wanted to eliminate the reserve, they should have left it at zero — not subtract $700 million per year.”

Page’s Institude of Fiscal Studies and Democracy looked at the New Democrats’ platform for the party and agreed that the estimates for its big-money programs and taxes were reasonable, a seal of approval the party has boasted about.

“We did not examine or have discussion about a reserve when we examined cost estimates,” Page says, and the institute didn’t sign off on the final deficit figures.

So best, the NDP platform books $700 million a year in unspecified savings and hides them in a line that’s supposed to show how careful they are. That would mean they’re smart but dishonest, and frankly it doesn’t make any sense.

More likely, the NDP’s budgetmakers mixed up their numbers, right before wrapping everything up with a bow, and made a mistake so basic nobody caught it.

dreevely@postmedia.com

twitter.com/davidreevely

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Trudeau remains under increased security

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High profile security surrounds Liberal Leader Justin Trudeau as he arrives at a rally in Mississauga, Ont., Saturday, Oct. 12, 2019. The Rally was delayed for 90 minutes due to a security issue.

Frank Gunn/The Canadian Press

Liberal Leader Justin Trudeau remained under increased security Sunday morning, with tactical security officers and sniffer dogs accompanying the Liberal campaign as it departed downtown Toronto.

The increased presence comes a day after Mr. Trudeau wore a protective vest under his shirt at a rally in Mississauga, Ontario. His campaign has been tight-lipped about the reasons for the increased presence but the Liberal leader is scheduled to speak with reporters Sunday afternoon.

Mr. Trudeau didn’t appear to be wearing a protective vest on Sunday.

At his Saturday night rally Mr. Trudeau arrived at the event 90 minutes late wearing the vest under his shirt and suit jacket and was accompanied by tactical security officers wearing backpacks. More than 2,000 people were in attendance. Cameron Ahmad, a spokesperson for the Liberals, said the campaign had no comment about the delay or increased security for Mr. Trudeau. Mr. Trudeau’s wife, Sophie Gregoire Trudeau, was also supposed to speak at the rally Saturday but didn’t end up attending. Mr. Ahmad declined to comment on the change of plans.

Mr. Trudeau is scheduled to speak to reporters at a food drive in Liberal candidate Ahmed Hussen’s riding of York South-Weston Sunday afternoon.

He will then make whistle stops with Liberal candidates in Newmarket and Richmond Hill, followed by a visit to a Hindu temple in Etobicoke. NDP Leader Jagmeet Singh is campaigning in B.C. on Sunday and will vote in advance polls in his Burnaby South riding. Conservative Leader Andrew Scheer is not campaigning today.

NDP leader Jagmeet Singh walks along Bloor Street during a campaign stop in Toronto on Saturday, October 12, 2019.

Nathan Denette/The Canadian Press

The Liberal campaign is targeting the NDP amid the party’s rise in the polls. Mr. Trudeau held a rally with nearly 500 people in Burnaby Friday night, but didn’t mention the NDP or Mr. Singh, who is riding high on the positive attention he received following his debates appearances.

However, the Liberal leader changed tactic Saturday night at the Mississauga rally, taking aim at Mr. Singh. “Remember this: The NDP couldn’t stop [Stephen] Harper. They couldn’t stop Ford. And they can’t stop Scheer,” Mr. Trudeau told the crowd in Mississauga. “The only way to stop Conservative cuts is to vote Liberal.”

The increased focus on the NDP comes as polling from Nanos Research shows growing support for the New Democrats.

According to Sunday’s daily tracking survey from Nanos Research, the Liberals and Conservatives are deadlocked at 32 per cent support each. The New Democrats are up five points since Friday and now sit at 20 per cent, with the Greens at 9 per cent, the Bloc Québécois at 6 per cent and the People’s Party at 1 per cent.

The poll was sponsored by The Globe and Mail and CTV, with a total of 1,200 Canadians surveyed from Oct. 11 to Oct. 13. It has a margin of error of 2.8 percentage points, 19 times out of 20. Respondents were asked: “If a federal election were held today, could you please rank your top two current local voting preferences?” A report on the results, questions and methodology for this and all surveys can be found at http://tgam.ca/election-polls.

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The week before Election Day

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With advance polls open and just eight days left on the campaign trail, election strategists convened on the West Block to dish out some advice for federal party leaders.

The most recent Ipsos poll conducted for Global News showed the Liberals and Conservatives virtually tied, with support for the Liberals at 35 per cent and for the Tories at 34 per cent.

The same poll showed the NDP in a remote third spot, at 15 per cent. The Liberals and Conservatives were also in a tight race in two battleground provinces: Ontario and B.C.

Last few days of campaign

The challenge for incumbent Liberal Party Leader Justin Trudeau is that he is not just defending his record as prime minister, but also defending against the progressive platforms touted by both the Green Party and the NDP, according to Liberal strategist Richard Mahoney.

“But he’s going to have to try and convince Canadians over the course of this last week … that his program is the most realistic,” Mahoney said. “That’s the challenge for his last nine days.”

With a little more than a week left in the campaign, Trudeau will have to “contrast himself against Mr. Scheer.”

The last Ipsos poll saw 35 per cent of respondents cite Trudeau as the party leader who would make the best prime minister, with Scheer coming in second and polling at 30 per cent.

The Conservative Party released their fully costed platform on Friday, proposing various tax relief measures as well as tens of billions of dollars worth of federal budget cuts, with the goal of eliminating the deficit within five years.

9:24
Conservative election platform will mean longer waits for municipalities seeking federal funds

Conservative election platform will mean longer waits for municipalities seeking federal funds

This put the Liberal Party on the attack, with Trudeau criticizing the Tories for releasing their platform late in the campaign and saying the proposed cuts were “deeper” than those proposed by Ontario premier Doug Ford.

Conservative strategist Fred DeLorey called it a “prudent platform” that cuts out “wasteful spending.”

But NDP strategist Anne McGrath said the Tories’ fiscal plan — which includes cutting consulting costs and selling federal real estate while maintaining existing public servant levels — left them vulnerable to “parody.”

“It’s a little bit ridiculous to think that you can get that much money out of reducing the size of people’s desks and that sort of thing,” she said. “But the cuts themselves are very serious and quite severe.”

Scheer’s campaign appears to be “more about what’s wrong with Mr. Trudeau,” Mahoney said.

“The release of the platform this week on the eve of Thanksgiving weekend shows he’s really playing to the core of his support rather than reaching out to a broader coalition of people and say ‘Elect me prime minister and I’ll move the country forward,’” he said.





1:15
The lighter side of the campaign trail

The lighter side of the campaign trail

Debate analysis

NDP leader Jagmeet Singh’s debate performances garnered some praise from the strategists.

Mahoney noted that the English debate’s format — with multiple moderators and six party leaders — was a bit “convoluted.”

“There are just too many topics, too many leaders, maybe too many moderators, and not enough chance for people to get a sense of it,” he said.

But while Trudeau was, as expected, attacked from all sides, Singh came out as a “kind of chill dude.”

“He seemed kind of relaxed and there was a chance in this election that he faced a pretty daunting result, and I guess he may still because we don’t know,” Mahoney said. “But he did have a good night.”

McGrath chalked up Singh’s performance to “his sincerity, his authenticity, his preparation.”

Singh hit the campaign trail and entered the debates “with most Canadians not really having any impression of him” and with most people in media and political circles “basically writing him out of the picture,” she said.

“I think people were more than just pleasantly surprised,” McGrath said.

Now the question is whether Singh’s likeable debate performances “will translate into actual vote intention.”

McGrath said that when votes begin to move late in an election campaign, that momentum “tends to continue.”

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Trudeau says security threat won’t change how he campaigns

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OTTAWA – Liberal Leader Justin Trudeau said he followed advice from the RCMP to don a bulletproof vest at a crowded campaign rally in Mississauga, Ont. on Saturday.

“My first concern was the safety of my family and all the Canadians in the room. This will not change at all how I campaign,” said Trudeau, adding that he wouldn’t speak further on the matter.

The leader – wearing his staple button down shirt with rolled sleeves and no bulletproof vest – was in Toronto Sunday at a Thanksgiving food drive, shuffling canned foods from box to box, alongside Toronto Raptors President Masai Ujiri.

Trudeau did however speak to the rise of “polarization” during the campaign, pointing the finger at Conservatives for inspiring “falsehoods” and “fear.”

“We are seeing, unfortunately, an extremely high level of misinformation, disinformation online and people who are really trying to further polarize and make fearful Canadians. The reality is, the Conservative Party is continuing to spread falsehoods to Canadians, to scare them into voting for them or against us.”

On Saturday evening, Trudeau was an hour and a half delayed to the Mississauga rally due to the unspecified security threat.

Surrounded by a group of tactical officers wearing large backpacks, Trudeau shuffled his way through a crowd of about 2,000 supporters. His wife, Sophie Gregoire Trudeau, was expected to introduce her husband but was not present on stage.

The Liberal Party didn’t provide any further details after the rally about the information or events that led to increased security on Saturday and in an email to CTVNews.ca on Sunday, a spokesperson said they cannot comment on matters relating to the leader’s safety.

Trudeau’s rivals on the campaign trail have weighed in, offering sympathetic messages on Twitter and condemning any threats of violence against any leader.

The Conservative and Green camps took the day off for Thanksgiving festivities Sunday, while Trudeau and NDP Leader Jagmeet Singh made campaign stops.

Singh spoke about Trudeau’s situation and the “divisive politics” at play in Canada.

“I want to let Canadians know you can have all sorts of opinions and it’s ok to disagree but there should never be fear from any leader from any party to feel like there’s any threat to themselves.”

He added that his campaign has not received direct threats and that he feels “safe” under the purview of the RCMP.

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