Speaking of secrecy, our government officials and the elected mouthpieces who notionally run these departments often hide or keep secret important truths simply by talking about something else.

If one reads the latest news release from the Department of Finance one might conclude that Canada and Jimmy Flaherty are doing a good job.

Yet the secret truth, available with just a little digging, is that Canada dipped deeper in debt in December 2008, to the tune of an additional 3.8 billion on top of somewhere between 15 and 50 billion dollars of new debt incurred so far this fiscal year.

The chart illustrates a total new debt line (dark blue) and a dotted "best case" line. There are two primary factors which drive the difference between the two lines:

1. Year over year there was an announced change in how certain crown corporations obtain their borrowing; where previously said crown corporations (Canada Mortgage and Housing Corporation (CMHC), the Business Development Bank of Canada and Farm Credit Canada) obtained their own borrowing, this fiscal year the federal government proper arranged this financing to lever the stronger borrowing power of the national government and thus save some interest charges.
2. After the election - you might recall it was the election where Harper and Flaherty tried hard to pretend that all was well, that Canada would never go into deficit - Flaherty did an about face and called the situation facing the world and Canada a "crisis" and decided to help out the Canadian banks to the tune of buying $25 billion in CMHC-insured mortgages off the banks so they could clean up their balance sheets. Its something of a shell game.

Points 1 and 2 are related. CMHC is one of the crown corporations the government is obtaining financing for. Ultimately we taxpayers are all on the hook for what happens to these mortgages, because if as in the U.S. there is a surplus of defaulted mortgages over the insurance funds protecting them, guess who will be paying for the mess? You and me.

Even if we give Flaherty the benefit of doubt, writ large, and take off 10B + 25B = $35 billion dollars from the gross new accumulated federal debt, we are still left with over $15 billion dollars in new debt incurred by Stephen Harper's government.

Flaherty can play word games and claim that the government is still capable of operating without a deficit but the reality is that we are in fact 3.8B deeper in the hole in December, or $15.2B of new debt on a cumulative basis so far this fiscal year.