Reality Check

Promises, promises. The final tally CBC.ca Reality Check Team | Updated Jan. 19, 2006 | More Reality Check

With a final splurge in corporate tax cuts and capital gains breaks earlier Friday, Stephen Harper's Conservatives now check in with an impressive $75 billion worth of tax cuts and spending proposals over the next five years, at least by their count. The NDP are up to $71.5 billion, though their plan only covers four years. While the Liberals, despite scattering promises like spring flowers, pull up with a fairly miserly $61 billion over five years.

At least that's what they say. Our tally is a little different in some cases, so we have added an extra column to the numbers to explain where some of the wiggles are and to try to put the main parties on an equal footing. On that basis, the NDP emerges as the big spenders by a large margin. Costed over the same period as the others, their promises would top $87 billion.

The big question that will surely be thrashed out in the final days of the campaign is: how close to the fiscal sun are our fearless leaders willing to fly? It appears as if the federal government is rolling in dough for the foreseeable future. Mid-range projections forecast double-digit budget surpluses in each of the next five years. Still, there is a limit to how much new spending and tax cuts can be added to the rosiest of fiscal plans. And because no one would dare allow Ottawa to slip back into the red, now that the great deficit dragon has been well and truly slayed, this has opened the door to the parties making their own assumptions on what the future will bring. It's the kind of fiscal wistfulness that can make straight-on comparisons difficult.

Reality Check

That time frame offers two advantages. One, it allows us to give a broad snapshot of the priorities and spending plans of the three main national parties in such a way that voters can compare apples to apples. The other is that it provides a neat fiscal backdrop, courtesy of the long-range surpluses forecast in the Nov. 14 update, to check how affordable the individual party platforms really are.

Leaving aside the fact that the federal finance department has routinely underestimated projected surpluses for years, this most recent five-year forecast is an amalgam of the views of some 19 of the nation's top public and private sector economists. So it's the closest to a consensus we've got. What it says is that by 2010-11, after subtracting the pre-Nov. 14 commitments and setting aside a minimum $3 billion a year for debt payment, the federal government will have a projected planning surplus of $54.5 billion, as well as another $13.5 billion that the Liberals have historically set aside, a kind of rainy day fund that they label "economic prudence."

Remember this number

One problem is the hidden costs. Take the cost of putting people in jail. The law and order policies of all three parties suggest there will be more people being incarcerated for longer periods of time. But Canadian jails are already filled to capacity, so there may be a building boom in penitentiaries, which run upward of $75 million apiece. See our Reality Check, Doing the crime. But another complication is that parties often say they are funding their promises from "old money." In other words, redirecting the money to new priorities, or just simply repackaging old announcements. The Liberals are among the best "reannouncers": at least $4.5 billion worth of pledges bandied about in the current campaign are from the old money category, Reality Check calculates.

The NDP

Our numbers say: tax cuts $41.9 billion plus spending promises of $45.6 billion for a total of $87.5 billion over five years. That's $19.2 billion in excess of the consensus spending room.

Does the NDP platform add up? Maybe. They say they can find $20.5 billion in new revenues over the next four fiscal years, mostly through program efficiencies and what it expects to be lower debt repayment costs caused by lower interest rates. But the consensus forecast sees interest rates increasing modestly through the 2009-10 period.

One economist contacted by Reality Check concluded that the NDP numbers do add up, but they can only work by tossing out the billions of dollars that the Liberals have been setting aside for “economic prudence”. The NDP would be flying without a safety net. If a serious recession hit, and tax revenues declined and debt costs increased, the NDP would go into deficit.

The Liberals

Their numbers say: $39 billion in tax cuts and other measures from the Nov. 14 mini-budget plus $10.9 billion in other pre-election announcements plus $11.2 billion in campaign promises so far for a total of $61 billion over five years and what they now say is $7 billion available for further measures

Our numbers say: $33.5 billion in tax cuts and $31.2 billion in spending for a total of $64.7 billion over five years.

Paul Martin has a record of being fiscally prudent, so he has probably never wanted to get into much of a spending contest with his opponents. That said, one of the reasons the Liberal numbers are lower than ours is because the Liberals are taking the funds for at least two of their big announcements on caregiver leave and apprenticeships from the EI account, not from general revenues.

The Conservatives

Some big ticket items are being tossed overboard. The gun registry is being scrapped, and $2 billion of the Kyoto environmental budget is being looted for a tax break for transit users. The Liberal's $5 billion, five-year child-care program is out, but it is unclear whether the provinces will let the federal government walk away from the deal without compensation.

It is also unclear how much of the $5.5 billion that the Liberals committed to aboriginal issues in Kelowna in November will be retained by the Conservatives. Their fiscal plan contains no reference to the Kelowna commitment, but they will be under considerable pressure to honour a substantial portion of it. So, there are some question marks in the Conservative plan, and if everything doesn't break the right way, there may have to be fairly steep cuts in existing program spending down the road.

Their numbers say: $44.9 billion in tax cuts and $30.1 billion in spending for a total of $75 billion over five years. They also claim they will be able to produce a $23 billion surplus over that period which they have hinted they may give to the provinces to right the so-called fiscal imbalance.

Our numbers say: $51.8 billion in tax cuts and $22.9 billion in spending for a total of $74.7 billion over five years.

You will notice that although our totals and the Conservative totals are almost identical, the ratio of spending to tax cuts is quite different. Here's an example of how that happened. We have added to our list of tax cuts the 2005/06 portion of the Liberal cut announced in November. The Conservatives have said they will honour that portion of the tax cut, but it is not included in their total. That is worth $5.1 billion. On the spending side, the Conservatives have included $5.5 billion worth of programs announced after the 2005 budget, but before the fiscal update in November, which is when we started counting.

Conservatives | Liberals | NDP | Bloc | Green