“Election promises call for some magical thinking given economy” (CBC News)

Liberal Leader Justin Trudeau says, ‘We’re focused on putting money in the pockets of the families who will spend, save, grow the economy in meaningful ways, because that’s how we will get out of this recession that Mr. Harper has created for us.’ (Michael Bell/Canadian Press)

Laura Payton (CBC News):

All three leaders may be relying on some wishful thinking to fulfil their platform promises, given the state of the Canadian economy and its likely effect on government finances.

The parliamentary budget officer has already revised this year’s budget projections and expects a $1-billion deficit. That’s likely to eat up the already reduced contingency fund, which the Conservatives lowered from $3 billion to $1 billion for 2015-16.

Today the Canadian dollar is trading at around 77 cents US — it rose to 77.09 cents at midday after closing at 76.25 on Tuesday — and oil is trading around $43 US a barrel.

China’s devaluation of its currency threatens to cause even more problems.

The Conservatives have been cautious, hinging many of their pledges on an improved government budget. Harper noted last week that he expects those pledges wouldn’t be realized until “mid-mandate,” or about two years after the election.

The Conservative leader also admitted last week that Canada is likely in a recession after being pressed in the leaders’ debate by NDP Leader Tom Mulcair, who noted there has been five straight months of a shrinking economy. Six months or two straight quarters of contraction is the official definition of a recession.

Until that moment, Harper had avoided saying recession, pointing to projections that Canada will see overall growth for the year (the last two quarters are expected to be better than the first two).

Trudeau too has hedged his bets, telling journalists last week that he is committed to balanced budgets, but can’t guarantee them right off the bat.

“The Liberal Party recognizes that Stephen Harper has put us in deficit right now. We are committed to [a] balanced budget,” he said on Friday.

“But how long it takes to get there will depend on the size of the mess Mr. Harper has left behind.”

The Liberal leader said he’s focused on tax cuts for the middle class and better child benefits for people who need them.

“[It’s] why we’re focused on putting money in the pockets of the families who will spend, save, grow the economy in meaningful ways, because that’s how we will get out of this recession that Mr. Harper has created for us.”

Mulcair, speaking in Quebec City, called Trudeau’s approach “a unique perspective.” (…)

Neither Trudeau nor Mulcair offered much detail on how they would pay for their election promises given the lower-than-projected growth Canada has seen so far this year.

Mulcair said he can still cut business taxes and offer new social programs like universal daycare in a struggling economy, and said he’d release a costed platform later in the campaign.

He would not go into detail on how he’ll pay for his promises, or whether those promises may need to be readjusted.

Full article here