Only by the standards of the Liberal Party of Canada can last week's federal budget be described as "fiscally prudent." Perhaps it is if compared to Jean Chrétien's last budget in isolation, but that is hardly something to brag about. Readers will recall that budget 2003, tabled 13 months ago, hiked spending by an astonishing $16-billion over 2 years. It represented Ottawa's high-water mark of fiscal irresponsibility.

Ever since the happy day in 1998 when Ottawa balanced its budget and began churning out surpluses, spending has increased at a rapid pace. Total program spending in 1998 stood at $110-billion, excluding public debt charges. By 2003 - Mr. Chrétien's last year in office - program spending had risen to $143.5-billion, an annual increase of 6.1 per cent. And how does Paul Martin's spending plan compare to this record?

Under our "new" Prime Minister spending will jump by $4.5-billion and reach $147.9-billion in 2004, up 3.1 per cent, a significant improvement. However, the 2004 budget also shows program expenditures are set to jump by an additional $8.2-billion to $156.1-billion, a 5.5 per cent increase - not far off Mr. Chrétien's average.

All said, Mr. Martin's budget calls for an 8.9 per cent spending increase over the next two years. By what standard can this be labelled restraint?

The best measure of Ottawa's spending growth is in real per capita terms. No change in this measure means the size of government has remained constant relative to inflation and population growth. If, however, government spending is measured as a percentage of economic growth - as is popular with people who prefer a bigger government - there is an inherent bias toward higher spending levels.

Keeping government expenditures fixed as a proportion of the economy, in truth, means spending will increase and the state will be larger relative to the cost of living and the number of people served.

Had Ottawa's spending kept pace with inflation and population growth at 1998 levels, total program spending would be $132-billion in 2004, much lower than $148-billion projected by Mr. Martin. A prudent increase to deliver the same levels of programs and services to Canadians would have spending rising to $133.6-billion next year. That is a far cry from Mr. Martin's projected spending of $156.1-billion. Because Messrs. Chrétien and Martin were both unwilling to control spending by keeping the relative size of government constant, the cost to Canadians taxpayers is an astonishing $72.7-billion over the 1998-to-2005 period.

The difference between real per capita growth and Mr. Martin's turbo-charged spending plan will be $16-billion in 2004 and another $22.5-billion in 2005. That is plenty to cut income taxes and leave enough for modest debt re-payment. Moreover, it would also mean less money for Liberal-friendly advertising firms, less subsidies for businesses and a pause in ever-increasing levels of spending.

Is limiting growth to this yardstick too restrictive? Not according to the Prime Minister. In Budget 2000, then-Finance Minister Martin reassured Canadians that over a five-year period spending growth would be limited to inflation and population growth. His vow to be fiscally prudent was quickly broken in favour of more spending. Today he favours more spending and high taxes. How is this different than Jean Chrétien's record?

In the years ahead, Ottawa's tax revenues and budgetary surpluses will continue to grow with the economy, guaranteeing Mr. Martin the ability to spend even more. Surpluses - which amount to over-taxation by Ottawa - will total more than $16-billion in the next three years. It is time for the Liberal government to roll out a multi-year tax relief package.

The government has a decade-long history of low-balling surpluses to diminish Canadians' expectation of tax relief. Instead, the extra billions in cash are quickly spent at year-end. The word "prudence" has become an excuse used by Mr. Martin to fudge the revenue and surplus numbers to avoid providing Canadians with tax relief. If he survives the election, his government will be well positioned to reopen the spending taps, and fulfil Mr. Chrétien's spending legacy.