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Reality Check

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

Spending
 
Crunch time. With a little more than a week to go until voting day and all official party platforms now in hand, it's time once again to tote up the many campaign promises. And call out the parties where we can on how they are going to pay for them all.

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

Reality Check is supplying our own set of numbers on the promises, not because we think we are the superior accountants. We've merely tried to keep track of the many promises that have been trotted out since the unofficial starting gun, the Nov. 14 mini-budget that first set out the Liberal, and some of the NDP, income tax cuts. And cost these out over the next five fiscal years, from now until 2010-2011.

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

The total of these two figures - $68 billion - is broadly speaking the spending room the parties have over the next five and half years for their platforms not to slip into the red. By our calculation both the Conservatives and NDP will be well above this figure. But calculating the difference between promises and spending room, however, is not as easy as it might appear.

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.

Spending
 
For comparison purposes, Reality Check extended the NDP's platform to a fifth year whenever we could, and usually with the party's approval. The Bloc Québécois platform is for $55.8 billion over three years. But because it is not broken out in the same detail as the others, and is almost entirely focused on Quebec, we did not provide our own detailed analysis.

The NDP

Their numbers say: tax cuts $32.6 billion plus spending promises of $38.9 billion for a total of $71.5 billion over four years and a presumed net surplus of $20.7 billion which they promise to use to pay down debt and top up the EI fund.

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 ´┐Żeconomic prudence´┐Ż. 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

The Liberals are kind of stuck with the projections from their mini-budget forecast in November so they have less room to wiggle the numbers around.

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

The Conservatives say they can pull off $75 billion in spending and tax cuts and still produce a surplus of almost $23 billion because under their plan, government spending will be slowed and revenue will rise more quickly. It sounds suspiciously like the old neo-conservative notion that cutting taxes will stimulate the economy and result in higher government revenues, but Harper has not specifically said that.

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

Conservatives Cost (millions) Date announced  
Tax cuts
Jewelry excise tax relief $120 Jan. 13  
Dividend tax credits (announced by Liberal government) $1,600 Nov. 23  
Corporate tax cuts and forestry bio-energy CCA measures $900 Jan. 13  
Capital gains tax exemption on reinvestments $750 Jan. 13  
Capital gains tax exemption for fishing assets $150 Dec. 6  
Tax credits for building low income housing $800 Jan. 12  
Tax credit for public transit users $2,000 Dec. 29 Reallocated from climate change funding
Cutting GST to 6 per cent immediately, 5 per cent within 5 years $32,300 Dec. 1 This will replace most of the tax cuts announced by the Liberals in the Nov. 2005 fiscal update
Increasing the basic personal credit by $500 (for 2005/06 only) $1,880 Nov. 14  
Decreasing the lowest personal income rate to 15 per cent (for 2005/06 only) $3,225 Nov. 14  
Child-care space tax credit $1,250 Dec. 5 Will replace $4.8 billion allocated for Liberal child care plan
Cutting taxes for small businesses $1,800 Dec. 7  
$500 tools tax deduction for apprentices $150 Dec. 8  
$500 tax deduction on textbooks $375 Dec. 8  
Tax exemption for first $10,000 of student scholarship or bursary income $25 Dec. 8  
Increasing RRSP and private pension deduction for seniors $2,235 Dec. 9  
$500 tax credit for sports registration for children under 16 $650 Dec. 12  
$2,000 credit for employers hiring apprentices $800 Dec. 7  
Reduction of the Right of Landing Fee $500 Jan. 4  
Removing Capital Gains Tax on donated stocks $250 Jan. 7  
Subtotal $51,760    
 
Spending
Improvements to the Canada Student Loans program $100 Dec. 8  
Immigration measures from November Fiscal Updates $1,257 Nov. 14  
New agencies and inquiries $285 Jan. 13  
Overseas development assistance $425 Jan. 13  
Other funding for students, research and development $500 Jan. 13  
$1,000 grants for apprentices $400 Dec. 8  
Additional funding for farm support programs $2,500 Dec. 21  
$1,200 child-care allowance $8,250 Dec. 5 Taxed at rate for lower-earning spouse
Funding for highway and border infrastructure $2,000 Jan. 11  
Stand Up For Safety plan $500 Jan. 5  
Pacific Gateway Initiative - funding to improve trade with Asia-Pacific $591 Dec. 17  
Setting up a Canadian Strategy for Cancer Control $260 Dec. 10  
Additional defence spending, including Arctic sovereign initiatives $5,325 Dec. 13  
Fighting the mountain pine beetle problem in B.C. $500 Dec. 17  
Subtotal $22,893    
Total $74,653    


Liberals Cost (millions) Date announced  
Tax Cuts
Eliminating capital gains taxes on donations of stocks $250 Jan. 18  
Eliminating capital gains taxes on ecological land gifts $25 Jan. 18  
Tax deduction for volunteer public safety workers $75 Jan. 13  
Removal of the Right of Landing Fee $855 Jan. 3  
Increasing basic personal amount $6,345 Nov. 14 From fiscal update
Reducing 16% tax rate to 15% $17,105 Nov. 14 From fiscal update
Reducing 22% tax rate to 21% (starting 2009/10) $1,965 Nov. 14 From fiscal update
Reducing 26% tax rate to 25% (starting 2009/10) $560 Nov. 14 From fiscal update
Raising top income bracket to $200,000 (starting 2009/10) $910 Nov. 14 From fiscal update
Introducing a Working Income Tax Benefit $2,250 Nov. 14 From fiscal update
Corporate tax cuts $1,130 Nov. 14 From fiscal update
Increased capital gains exemption for small businesses and farmers $600 Dec. 19  
Tax credits for dividends from large corporations $1,500 Nov. 23  
Subtotal $33,570    
 
Spending
Funding for community, sports and recreational facilities $350 Jan. 15  
Long-term commitment to the Border Infrastructure Fund $1,000 Jan. 15  
Long-term commitment to the Canada Strategic Infrastructure Fund $5,000 Jan. 15  
Canada Corps youth international internship program $150 Jan. 14  
Increased funding for research and development funding in developing countries $200 Jan. 14  
Establishing a Canada Centre for Peace and Democracy in the Middle East $10 Jan. 14  
Compensation fund for families of public safety officers $25 Jan. 13  
Training for emergency response workers $140 Jan. 13  
Funding for public safety worker statistics $10 Jan. 13  
Terrorism response training for emergency response workers $3 Jan. 13  
Support for four advanced research and development initiatives $180 Jan. 12  
National renewable fuel standard $500 Dec. 20  
Funding for national parks and protected areas $150 Jan. 11  
Other funding announced between fiscal update and election period $468 November  
Improvements to immigration system $700 Nov. 23  
Forest industry competetiveness strategy $1,500 Nov. 24  
Improving Internet use in small businesses $90 Nov. 14 From fiscal update
Expansion of renewable power production incentives $50 Nov. 14 From fiscal update
Tools to help caregivers find the best community resources $25 Jan. 6  
Funding for community-based disability care $25 Jan. 6  
Increasing the caregiver tax credit $50 Jan. 6  
Expansion of the caregiver assistance program $1,200 Jan. 6 Funded through Employment Insurance
Expansion of the New Horizons for Seniors program $50 Jan. 6  
Funding for Registered Disabilities Savings Plans $100 Jan. 6  
Health care guarantee fund $75 Jan. 4  
Patient management training programs for health workers $10 Jan. 4  
Funding for a national wait-times research agenda $10 Jan. 4  
Canadian Health Infoway $50 Nov. 14  
National Cancer Strategy $300 Jan. 4  
Bringing in 1,000 new family physicians $100 Jan. 4  
Removing Employment Insurance waiting period for apprentices $75 Jan. 5 Funded through Employment Insurance
Lester B. Pearson post-secondary scholarships $60 Jan. 5  
One-year extension of current homelessness initiatives $263 Nov. 22  
Community safety initiatives, including the handgun ban $650 Dec. 8  
50/50 tuition payment plan for students $1,850 Nov. 14 Of the total spending from the fiscal update, $3,260 is from previous funding sources
Canada Access Grants improvements $550 Nov. 14 From fiscal update
Other post-secondary education funding $1,700 Nov. 14 From fiscal update
Workplace-based skills development $3,522 Nov. 14 From fiscal update
Assisting persons with disabilities $400 Nov. 14 $150 million announced in update, $250 million additional funding announced Jan. 6
Other spending for creating opportunities for Canadians $354 Nov. 14 From fiscal update. Does not include 2005/06 program costs
Research and innovation funding $1,814 Nov. 14 From fiscal update. Does not include 2005/06 program costs 
Rural and Aboriginal broadband Internet funding $100 Nov. 14 From fiscal update
Pacific Gateway Initiative $590 Nov. 14 From fiscal update
Other global commerce initiatices $485 Nov. 14 From fiscal update
Funding for aboriginal programs, announced at the Kelowna summit $5,500 Nov. 25  
Improvements to the Goose Bay Armed Forces base $59 Nov. 25  
Enhanced security for public transit/rail $110 Nov. 23  
Extension of current rural development funding initiatives $90 Dec. 20  
Clean up of Great Lakes and St. Lawrence River $500 Jan. 7  
Subtotal $31,193    
Total $64,763    


NDP (Four-year plan) Cost (millions) Date announced  
Tax Cuts      
Abolishing Right of Landing Fee $900 Jan. 11 Cost for 2010/11 = $225 
Increasing the federal child tax credit by $250 each year for four years $12,200 Dec. 12 Cost for 2010/11 = $5,100 
Increasing the basic personal credit $6,215 Dec. 5 Cost for 2010/11 = $130
Decreasing the lowest personal income rate to 15 per cent $14,215 Dec. 5 Cost for 2010/11 = $2,890 
Subtotal $33,530   Five year subtotal = $41,875
 
Spending
Training for security and border guards $40 Jan. 11 Cost for 2010/11 = $10
Victims of terror fund $100 Jan. 11  
Millennium development goals $1,500 Jan. 11 Cost for 2010/11 = $1,000
Chinese head tax apology fund $50 Jan. 11  
National conservation fund $250 Jan. 11  
National park fund $400 Jan. 11  
Additional Kyoto funding $7,200 Jan. 11  
Farm income stabilization fund $1,000 Jan. 11  
Pine beetle emergency fund $400 Jan. 11  
Support for artists and the arts $600 Jan. 11 Cost for 2010/11 = $150
Affordable and co-op housing $1,500 Jan. 11  
Immigrant settlement program $40 Jan. 11 Cost for 2010/11 = $10
Crystal meth initiatives $200 Jan. 6 Cost for 2010/11 = $50
Youth-at-risk initiatives $400 Jan. 6 Cost for 2010/11 = $100
National victim assistance program $200 Jan. 6 Cost for 2010/11 = $50
National witness protection program $200 Jan. 6 Cost for 2010/11 = $50
Prescription drug plan $3,000 Jan. 4 Cost for 2010/11 = $1,000
National cancer strategy $250 Jan. 11 Cost for 2010/11 = $50
Health care provider training $800 Jan. 5 Cost for 2010/11 = $200
Creating new non-profit child-care spaces (four-year plan) $3,900 Dec. 12 Cost for 2010/11 = $1,350
Improvements to border crossings to aid the auto industry $1,000 Dec. 9 Cost for 2010/11 = $250
Expansion of home-care services $2,000 Dec. 8 Cost for 2010/11 = $1,000
Increasing number of hospital long-term care spaces $2,000 Dec. 8 Cost for 2010/11 = $500
Post-secondary transfer payments $2,500 Dec. 5  
Federal student grant program $1,000 Dec. 5 Cost for 2010/11 = $250 
Funding for aboriginal programs, announced at the Kelowna summit $3,851 Dec. 21 Cost for 2010/11 = $1,649 
Accelerated gas tax dispersal to cities and communities $3,600 Dec. 20  
Subtotal $37,981   Five year subtotal = $45,650
Total $71,511   Five year subtotal = $87,525


Bloc Cost (millions) Date announced
Total three year spending from the platform, announced Nov. 30th $55,800 Nov. 30


Green Cost (millions) Date announced;
Tax Cuts
Decreasing the lowest personal income rate to 15 per cent $17,500 Dec. 9
Subtotal $17,500  
 
Spending
Funding to address inactivity and obesity $500 Jan. 2
Implementing national cancer-fighting strategy $500 Dec. 18
Implementing the Kyoto plan $7,140 Dec. 9
Investment in renewable energy $1,500 Dec. 9
Public works projects in Haiti $500 Oct. 4
Subtotal $10,140  
Total $27,640  


Projected surplus to 2010/11 $54,500  

   
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