Liberal fiscal plan outlines $146.5B in spending, tax cuts over next 4 years
Grits to get to $1 billion surplus by end of mandate by cutting Tory programs, government spending
The federal Liberals say they can add almost $146.5 billion in new government spending and tax cuts over the next four years, and still bring the budget back to balance with a surplus of about $1 billion by the end of a four-year mandate.
The party's most prominent financial lieutenants released the full costing of the Liberal campaign platform Saturday, outlining the billions in new spending and revenues that would be in store for the next four years should a Liberal government be elected on Oct. 19.
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To get to the surplus, the Liberals plan to find billions in savings from eliminating a number of tax breaks, cutting back on government spending and cracking down on tax evasion. The measures include reviewing and cutting many programs introduced by the Conservatives, where they say they expect to find $3 billion in savings by 2020.
"Nothing is totally off the table," said candidate John McCallum, adding that the party would focus especially on measures which disproportionately favour high-income Canadians. He was joined by fellow candidates Ralph Goodale, MaryAnn Mihychuk and Jean-Yves Duclos.
A Liberal government would replace the Universal Child Care Benefit, the Child Tax Benefit and National Child Benefit Supplement with a program that would be based on family income.
The plan to cancel income splitting for families would save $2 billion a year, and a tax increase on the wealthiest Canadians is expected to bring in just under $3 billion annually.
Balanced budget not a guarantee
The party also plans to pull extra money from EI revenue, compared to what is already allotted in the Conservatives' plan, and to bring in half a billion dollars next year and $2 billion in subsequent years.
The Liberals emphasize that their plan would create tens of thousands of jobs.
"This is not trivial," McCallum said.
Former parliamentary budget officer Kevin Page called the Liberal plan "realistic" during an interview on CBC News Network.
"They've updated the numbers from budget 2015 so it takes into account a weaker economy in 2015, weaker oil prices," he said.
The plan is based on the latest available figures from the parliamentary budget officer and the bank of Canada.
$7.5B in promises still to come
The promise of a balanced budget could easily be jeopardized if any of those measures should fail to bring in the revenue the Liberals are banking on — and there are still more spending promises to come.
Liberal Leader Justin Trudeau still has to announce about $7.5 billion in spending promises for the next four years that could touch on what the party plans to do for health care spending and climate change.
The New Democrats, meanwhile, have decried it as "a Liberal austerity plan."
NDP candidate Andrew Thomson charged that the proposed program expenditure review is "a substantially coded word for cuts," during a news conference in Ottawa.
Fellow NDP candidate Sadia Groguhé said in French that she is "very concerned [that Trudeau is] putting his debt on future generations."
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The Conservatives seized on the $6.5 billion in savings the plan requires, warning of potential tax hikes that should make Canadians "hold on to their wallets." Conservative candidate Pierre Poilievre said the Liberals couldn't "pull $6.5 billion out of thin air," and that they would have to find the money through cuts or tax increases.
Poilievre called the plan "the most expensive" of all three parties.
The plan calls for a deficit of just under $10 billion in the next two fiscal years, the result of a plan to add more than $33 billion in the next fiscal year and $36 billion the year after in new spending for infrastructure projects and a new monthly child benefit.
The deficit drops to $5.7 billion in year three, with the books creeping into balance by the fourth year.
The Liberals are hoping that infrastructure spending in particular helps prod economic growth in Canada to help increase tax revenues and pad government coffers.
Expand PBO mandate
The party, however, has not counted any of the extra revenues from those investments — known as a multiplier effect — into their budget calculations. Nor has the party counted any tax revenue that the government could accrue from the legalization of marijuana.
The plan also exhausts an annual contingency fund of about $3 billion that the federal government keeps on the books for unforeseen circumstances.
The Liberal plan wouldn't bring the contingency back into play until the fourth year of its mandate, at which point it would start at $1 billion — the amount the party is budgeting for its surplus.
The Liberals also say they would expand the mandate of the parliamentary budget officer to allow it to check the costing of any promises parties make during federal elections.
- An earlier version of this story did not note that the $146.5 billion represented both new spending and tax cuts.Sep 26, 2015 5:31 PM ET
With files from CBC News and Hannah Thibedeau