Because of the pandemic and the necessary stimulus, the parties vying to form the next government are common spenders, which will lead to large deficits in the coming years, regardless of which party is elected.
University of Sherbrooke professor Luke Goodbot and colleagues in the Research Chair in Taxation and Public Finance, which he holds, analyzed the parties’ financial frameworks.
The financial framework is the planning of income and expenditures that makes it possible to see how the parties plan to finance their promises, with supporting figures.
“What we are seeing is that all sides are saying they are going to spend more than the PBF,” Mr. Goodbot said. As a result, all parties are heading for larger deficits than expected when calling for elections.
Conservatives in Erin O’Toole are the ones who expect to run into the biggest deficit in the first year, due to the rapid stimulus measures.
In general, “Conservatives are more in the center, and have less spending-oriented promises,” notes University of Ottawa Professor Emeritus Economics Serge Columbus on his part.
Expensive tax credit
This is also reflected in childcare: Conservatives prefer a tax credit based on parental income rather than the national childcare network that Justin Trudeau has promised.
“The middle class, with O’Toole, will pay three times that amount [pour une place en garderie] ”, estimates Pierre Fortin, Professor Emeritus of Economics at the University of Quebec in Montreal.
Ironically, it is the new democrats led by Jagmeet Singh who will increase the debt as little as possible. The reason is simple: The NDP is the party that promises the most tax increases, especially among the rich.
The National Party spit it out Cash
From this perspective, you have the impression that the National Party is spending less and reducing the new deficit, but it is spending more. It is the party that will seek the most revenue to finance its new expenditures,” explains Mr. Goodbot.
If we exclude the Quebec bloc, which has set a fiscal framework over just three years (it has been monopolized by a massive increase in health transfers), the National Party is still very profligate. But the net cost of their spending (which adds to the debt) is less than that of the other parties (see below).
The legislature and the NDP are proposing a lot of spending. The two parties are on the left much more than we are used to seeing in Canada, in Canadian political history, in terms of economic policy,” notes Mr.
During the period as a whole, “the Liberal Party has the highest commitments, and the highest net spending,” Mr. Goodbot notes.
From 2021 to 2026, the net cost of Justin Trudeau’s commitments (new spending minus new taxes the party plans to collect) exceeded $70 billion.
Despite Erin O’Toole’s promises to stay on the path of balanced budgets within 10 years, it is clear that no party is leading the way back to that balance.
But with interest rates ranging from 1 to 2%, and an increase in Canadian income of 4%, “we should calm the deficit,” which is what makes Mr Fortin relative. This is because the debt burden is expected to decrease gradually in relation to GDP.
We are still among the least indebted countries in terms of GDP. It’s so easy, for parties […] on spending too much,” Mr. Coulomb recalls.
However, there is an area of uncertainty looming: the inflation zone. On the other hand, the Chinese Communist Party promises an annual GDP growth of 3%. “It’s easy to say, but it’s very hard to do,” Colombe says.
Canadian Liberal Party: – 157 grams
Canadian Conservative Party: – 168 grams
New Democratic Party: – 145 gm dollars
Canadian Liberal Party: -63 gm dollars
Canadian Conservative Party: -57 g dollars
New Democratic Party: -54 grams dollars
Canadian Liberal Party: -50 gm dollars
Canadian Conservative Party: – 44 gm dollars
New Democratic Party: -46 grams dollars
Canadian Liberal Party: -35 g dollars
Canadian Conservative Party: -26 grams dollars
New Democratic Party: -35 g dollars
Canadian Liberal Party: – 32 g dollars
Canadian Conservative Party: -25 grams dollars
New Democratic Party: – 34 g dollars
Canadian Liberal Party: 53 grams dollars
Canadian Conservative Party: 53 grams dollars
New Democratic Party: 29 gm dollars
Canadian Liberal Party: 70 grams dollars
Canadian Conservative Party: 55 grams
New Democratic Party: 48 grams dollars
Canada mental health transfer
Expand access to a family doctor
2 billion dollars
Increased guaranteed income threshold
Health conversions increased by 6%
Investments in carbon sequestration
1 billion dollars
Aged Care Benefit in Canada
1 billion dollars
Minimum income. Guaranteed for the disabled
9 billion dollars
500,000 new affordable housing units
6 billion dollars
Source: Federal Elections 2021 – Summary of Political Parties Financial Frameworks. Research Chair in Taxation and Public Finance at the University of Sherbrooke
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