Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • 2019 Federal Budget Analysis February 27, 2019
    Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis  Aim high, spend low: Federal budget 2019 by David MacDonald (CCPA) Budget 2019 fiddles while climate crisis looms by Hadrian Mertins-Kirkwood (CCPA) Organizational Responses Canadian Centre for Policy […]
    Canadian Centre for Policy Alternatives
  • Boots Riley in Winnipeg May 11 February 22, 2019
    Founder of the political Hip-Hop group The Coup, Boots Riley is a musician, rapper, writer and activist, whose feature film directorial and screenwriting debut — 2018’s celebrated Sorry to Bother You — received the award for Best First Feature at the 2019 Independent Spirit Awards (amongst several other accolades and recognitions). "[A] reflection of the […]
    Canadian Centre for Policy Alternatives
  • CCPA-BC welcomes Emira Mears as new Associate Director February 11, 2019
    This week the Canadian Centre for Policy Alternatives – BC Office is pleased to welcome Emira Mears to our staff team as our newly appointed Associate Director. Emira is an accomplished communications professional, digital strategist and entrepreneur. Through her former company Raised Eyebrow, she has had the opportunity to work with many organizations in the […]
    Canadian Centre for Policy Alternatives
  • Study explores media coverage of pipeline controversies December 14, 2018
    Supporters of fossil fuel infrastructure projects position themselves as friends of working people, framing climate action as antithetical to the more immediately pressing need to protect oil and gas workers’ livelihoods. And as the latest report from the CCPA-BC and Corporate Mapping Project confirms, this framing has become dominant across the media landscape. Focusing on pipeline […]
    Canadian Centre for Policy Alternatives
  • Study highlights ‘uncomfortable truth’ about racism in the job market December 12, 2018
    "Racialized workers in Ontario are significantly more likely to be concentrated in low-wage jobs and face persistent unemployment and earnings gaps compared to white employees — pointing to the “uncomfortable truth” about racism in the job market, according to a new study." Read the Toronto Star's coverage of our updated colour-coded labour market report, released […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Comparing the Platforms: A Better Way to A Balanced Budget.

A quick and easy way to get a very bad bad headache is to attempt to compare and contrast the fiscal plans attached to the major party platforms. But they throw some light on the real priorities of the parties, and the real choices in play in the election.

One thing the Conservatives, Liberals and New Democrats apparently have in common is a commitment to balance the federal budget over the life of the next Parliament.

However, there are important differences.

The Conservatives and New Democrats say they would balance the books by 2014-15.

The Liberals go a fair bit further. They commit to a 1% deficit within two years, which is a bit less than the 2011 Budget forecast of a 1.1% of GDP deficit  for 2012-13. They pledge further reductions thereafter, and raise more in new revenues than they would add to spending by allocating $1.5 Billion each year to a new “Prudence Reserve Fund” which would likely, Paul Martin style, be used to reduce the deficit. Overall, they seem committed to a faster pace of deficit reduction than either the Conservatives or the New Democrats, which implies the possibility of spending cuts should the economic recovery begin to slow and/or the deficit does not fall as fast as forecast in the last Budget.

The Conservative platform is basically a somewhat amended version of the Budget they just introduced, with the costly family income tax splitting measure and doubling of TFSAs to be added once the deficit is gone.

As I have noted earlier, eliminating the deficit requires that you believe (1) that the currently optimistic fiscal forecast is accurate notwithstanding the criticisms of experts like Peter Devries and the Parliamentary Budget Officer and (2)  that $4 Billion in additional savings savings can be found.

I take the Conservatives more or less at their word that, given a majority, they are prepared to cut their way to budget balance and a new round of tax cuts, since I suspect there are a lot of  federal programs that they don’t like very much.  Readers may want to take a glance at the spending estimates of Departments like Canadian Heritage, Human Resources and Social Development, Citizenship and Immigration and Indian and Northern Affairs to guess where the axe will fall to eliminate another 5% of direct program spending. Arts and film development programs? The CBC? Social Sciences and Humanities research? What remains of the Office for the Status of Women?  Grants and contributions to social development organizations? Student loans and grants? Disability programs? Aboriginal learning and health programs? The list goes on.

Neither the Liberals nor the New Democrats are very explicit about what spending  measures embodied in the 2011 Budget would be rolled over into a new fiscal plan if there were to be a change in government. Some Conservative promises have found their way into the platforms of the other parties. For example, all parties seem to support tax credits at varying levels for volunteer firefighters, to cite a minor example, and the Liberals and New Democrats  both allocate $400 million to the GIS on top of the modest Conservative annual increase of $300 Million.

One assumes, or hopes, that  there would be some significant revisiting of expensive  Conservative spending priorities, such as on crime and defence,  in a new fiscal plan.

I see one big difference between the New Democrat fiscal plan and those of the other parties. The total amount of money to be raised through new revenue measures is really quite substantial – $9.0 Billion in 2011-12 rising to $15.2 Billion in 2014-15. That is more than double the new revenues that the Liberals would raise on top of the current fiscal plan.

The New Democrats would introduce a bigger corporate tax rate increase than the Liberals, raising it to 19.5% rather than 18%, which will raise about $4 Billion more per year. They propose to raise $2 Billion from ending fossil fuel subsidies, almost ten times as much as the Liberals. They also propose to raise $1 Billion in new revenues next year rising to over $3 Billion in 2014-15 by cracking down on tax havens. (Details are apparently  to follow.)  There is a lot of evidence that the CRA have been extremely lax in preventing large-scale Canadian tax evasion and these numbers seem credible.

The New Democrats would also raise significant revenues – $3.6 Billion this year, rising to $7.4 Billion by 2014-15 – from an emissions cap and trade system. Proceeds from selling emissions permits would go to an impressive set of green economy initiatives, including major investments in energy efficient housing, expansion of public transit, and clean energy.

As Mike McCracken says in a short note included in  the NDP platform, major changes in the mix of spending compared to the current fiscal plan  would likely give a boost to job creation.  The big items in terms of job creation are significant tax credits to business for job creation and real investment in place of no strings attached tax breaks; the major green jobs package; and modest funds allocated to child care and other services which would create new jobs while meeting caring needs.

While it is fiscally cautious, the New Democrat platform does point to a better way to bring down the deficit, through job creation rather than through spending cuts.

I might also note – since it has not been widely noted- that New Democrat support for a continued 6% escalator in health transfers is clearly and explicitly tied to enforcement of the Canada Health Act and maintenance of publicly delivered health care.

Enjoy and share:

Comments

Comment from kirbycairo
Time: April 11, 2011, 12:45 pm

It amazes me that this is a pretty straightforward and mainstream budget but many Canadians still think of the NDP as some kind of radical socialist party. I guess people just don’t pay attention.

Comment from Paul Tulloch
Time: April 11, 2011, 3:24 pm

You nailed it Kirby, just today the national post had a front headline on jack L. Inferring he was an out of control socialist spender.

One could go a whole lot more into the budgets, but given all parties are professing balanced budgets, ultimately is, as Andrew states, what are the priorities, and to me jets, jails and corporate tax cuts are a long way from mainstream canadian values.

Comment from Travis Fast
Time: April 11, 2011, 4:57 pm

And then there are things that would change if the conservatives were not in power which seem small but when aggregated to the level of the country are not trivial matters. Take for instance the conservative insistence that water supply development proposals are P3s. So Abbotsford and Mission (BC) cannot access federal funds unless it is a P3 proposal. This is water privatization by stealth and we all know the track record of water privatization. So in some ways a narrow focus on budget balance does not really have much purchase on how public policy touches the ground at the community level.

Comment from FD Johnson
Time: April 11, 2011, 8:46 pm

I sincerely distrust the real goals of the Liberals. I like the NDP going after the tax havens for profits, notably taking our government-backed Chartered banks to task on this habit of taking profits out of the country and calling them “foreign investment”!

Write a comment





Related articles