OTTAWA – The Liberals are calling on Prime Minister Stephen Harper to fire his “$50-billion man” over the massive jump in the country’s deficit.
Liberal Leader Michael Ignatieff accused the government Wednesday of “incompetence on a historic scale.”
He said Finance Minister Jim Flaherty must be booted for financial mismanagement and failure to get economic stimulus funding flowing.
“On the most pressing issue facing the nation – this recession – the minister of finance has failed,” Ignatieff told the House of Commons.
“His projections are out the window again, leaving Canadians with the largest deficit in history – and no economic stimulus to show for it.
“How can the prime minister, or any Canadian, still have confidence in the minister of finance?”
The attack came a day after Flaherty dropped an economic bombshell, revealing that the deficit will exceed $50 billion this fiscal year – $16 billion more than he forecast in January.
Ignatieff also noted that in November, Flaherty forecast years of surpluses.
Harper responded that economic conditions have deteriorated around the world and Canada’s deficits are far below those of other countries.
Flaherty added that the new deficit, at three per cent of GDP, is still affordable and half the size of the deficits of the 1980s and ’90s in terms of GDP.
Monday’s massive recalculation of the deficit followed the grim news that the number of Canadians collecting employment insurance jumped 10.6 per cent in March to 681,400.
That’s the biggest EI surge since the recession started and viewed by economists as a warning sign of more bad things to come.
Just four months ago, in January’s federal budget, Flaherty predicted a shortfall of $34 billion in 2009-10. And just two months before that, he was touting years of surpluses in the fall economic update.
The jarring new estimate also comes just a month after Flaherty said he was not changing his deficit forecast.
Parliamentary budget officer Kevin Page had said the government’s numbers were too rosy. He released a report in March predicting the deficit would be at least $9 billion higher than anticipated over the first two years.
TD Bank chief economist Don Drummond, a former senior finance official, went even further, saying the shortfall would be about $18 billion more.