On Monday, Ottawa-South MP John Manley -Deputy Prime Minister, Finance Minister and perhaps he still has a part-time job at Tim Horton's as well - made his last trek to the House of Commons Finance Committee to deliver the annual Economic and Fiscal Update.

Knowing that he won't be back at Finance in a Paul Martin government, Mr. Manley looked relaxed and was in some command of his numbers, even though their believability - since the feds have underestimated surpluses of over-taxation to the collective tune of $80 billion - was raised by all opposition and even backbench government MPs.

On this point, the federal Liberals have the opposite problem when compared against the predecessor PC regime. From 1984 to 1993, the PC government consistently overstated revenue projections and never met them. So by 1993, we were in the ninth-year of Michael Wilson's (then Don Mazankowski's) infamous three-year balanced budget plan.

In response, the Liberals upon turfing Kim Campbell - oh yee of having a summer job as Prime Minister of Canada - from office in 1993, decided to downplay revenue projections, jack up spending estimates and manage expectations under the guise of caution and credibility. But when caution becomes concealment, notions of credibility give way to suspicion.

For a while this under-committing and over-delivering worked for Mr. Martin, but by 1997, everybody was on to this numbers game and has been with a vengeance for the better part of six years. No doubt this debate will continue and likely find its way into the next election campaign.

As for the update numbers themselves, most commentators, other advocacy groups and industry associations missed the point entirely. They all concentrated on how big the surplus may or may not be this year as opposed to looking at the trends which are much more instructive, not to mention alarming.

Since the books were balanced in 1997/1998, program spending is up 39% and is projected to rise to 75% by 2008/2009. This rate is double inflation and population growth over the same period. Simply put, it is unsustainable unless new tax revenues (or higher rates on existing taxes) are found.

As for the falsehood - uttered once again by Mr. Manley - of the so-called $100 billion tax cut, let's just call this the big lie. To start, $20.7 billion of foregone tax revenue due to the elimination of bracket creep is not a tax cut; rather it is simply revenue that the federal government will not collect. As well, we must factor in the extra $28 billion Canadians will pay in CPP premiums through to 2004. Finally, increases in the Canada Child Tax Benefit to the tune of $6 billion should properly be classified as expenditures as opposed to a tax relief measure.

Therefore, the government's five-year personal, business and EI tax reduction plan is closer to $47 billion. Is this welcome? Yes. Is this $100 billion as advertised? Absolutely not! And more to the point, this tax relief schedule is entering its final year of implementation in 2004. So what's next?

If we look at the Chretien decade other stats reveal the miserly nature of Ottawa's tax relief. In 1993/1994, total federal personal income tax paid by Canadians was $50 billion or 6.88% of GDP. For 2003/2004, the projected amount will be $83.4 billion or 6.89% of GDP. Translation: Our federal income tax burden hasn't budged on way or the other.

However if we dig deeper we find that personal income tax collections as a percent of total federal revenues have climbed from 43.1% to 46.2%. In other words, individuals are paying more of the freight and the government is taking a greater share of wealth creation at the front end from our paycheques as opposed to taxing the back end of consumption activity. This diminishes family incomes and retards productivity growth which runs contrary to the government's so-called innovation agenda.

It's funny how Mr. Manley forgot to tell this troubling story to Canadians on Monday … no wonder he seemed so relaxed.