Estimated 7 minutes
Liberal Leader Mark Carney presented his fiscal and spending strategy on Saturday, framing it around a crisis – “the biggest crisis of our lifetimes,” as he described it.
The United States is challenging Canada’s economy and jeopardizing Canadian sovereignty. The American president is “trying to fundamentally restructure the international trading system” and, in doing so, is “rupturing the global economy.”
“And to succeed in a crisis, you have to act with overwhelming force,” Carney stated during an announcement in Ontario. “In a crisis … the private sector retreats, and government needs to step up. Government must lead and catalyze private investment.”
Shortly after, Conservative Leader Pierre Poilievre made an appearance at his own announcement in British Columbia, where he dismissed Carney’s plan as a “spending bonanza” that Canada can’t afford.
“Mark Carney launched his platform today, announcing $130 billion in new inflationary spending,” Poilievre remarked.
WATCH | Liberal Leader Mark Carney unveils full party platform:
Liberal platform promises $130B in new measures over 4 years
Liberal Leader Mark Carney announced on Saturday that his election platform includes $130 billion in new measures over the next four years that will contribute an additional $225 billion to federal debt when combined with existing spending.
The questions surrounding how much federal spending has fueled inflation in Canada and what alternatives there were – especially concerning the support provided by the federal government during the COVID-19 pandemic for households, businesses, and other levels of government – haven’t been thoroughly discussed either during this campaign or leading up to it.
However, it’s fair to mention that Canada wasn’t alone in facing inflation post-pandemic; significant global factors played a role too. (An analysis by Scotiabank from December 2022 noted that 85 percent of inflation in Canada was due to global factors while only 15 percent was linked to government’s pandemic support programs.)
For now, discussions might center on the specifics of Carney’s $130-billion plan – and what exactly Poilievre’s Conservatives would propose differently.
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Liberal platform promises $130B in new measures over 4 years
Liberal Leader Mark Carney announced on Saturday that his election platform includes $130 billion in new measures over the next four years that will contribute an additional $225 billion to federal debt when combined with existing spending.
The questions surrounding how much federal spending has fueled inflation in Canada and what alternatives there were – especially concerning the support provided by the federal government during the COVID-19 pandemic for households, businesses, and other levels of government – haven’t been thoroughly discussed either during this campaign or leading up to it.
However, it’s fair to mention that Canada wasn’t alone in facing inflation post-pandemic; significant global factors played a role too. (An analysis by Scotiabank from December 2022 noted that 85 percent of inflation in Canada was due to global factors while only 15 percent was linked to government’s pandemic support programs.)
For now, discussions might center on the specifics of Carney’s $130-billion plan – and what exactly Poilievre’s Conservatives would propose differently.
How Carney Plans to Use $130 Billion
While the Conservative described it as “spending,” that $130 billion also accounts for revenue lost through tax cuts. The most expensive item listed in the Liberal platform is actually a previously announced income-tax cut costing an estimated $22 billion over four years. Another $12.5 billion would be allocated toward reversing capital gains changes proposed last spring by Justin Trudeau’s administration. In light of a crisis, one could question whether such funds might be better spent elsewhere. However, Poilievre isn’t really positioned well to criticize these two specific expenses – he’s promised that under a Conservative government those capital gains changes would also be canceled and has pledged an income tax cut that’s projected to be more costly than what Carney suggested. When it comes down to actual spending plans, there are three main areas where most of the new funds will go within Carney’s proposal – defense, infrastructure, and housing. For accounting purposes, Carney intends for $18 billion over four years for defense (with Liberals stating an extra $32 billion would be spent). Several infrastructure initiatives focused on “nation-building,” trade corridors, digital upgrades, healthcare facilities, community projects, and Arctic developments account for more than $20 billion combined. Build Canada Homes-an agency dedicated to affordable housing-will receive $11.8 billion over four years. Additionally,$6 billion will help municipalities reduce development charges and build housing-related infrastructure while a new tax incentive aimed at rental housing construction will cost another $4.1 billion. The extra spending would partially be balanced out through cost savings measures. The Liberals state transfers made towards provinces or individuals wouldn’t change but aim for savings totaling around $28 billion over three years by cutting “wasteful” expenditures along with adjustments within governmental operations-including limiting public service size. Finding these savings won’t likely come easily or without difficulties-a prior announced spending review already anticipated refocusing about $15 billion throughout this time frame. (Conversely though, the Business Council of Canada indicated that conducting a review comparable to mid-1990s austerity could uncover cuts worth about $90 billion over three years.) WATCH | Carney announces plan to ramp up military spending:Source link
