Thomas Mulcair’s New Democrats are calling on Justin Trudeau to release a detailed, costed fiscal framework before what could be a make-or-break debate this week on the economy.
In an open letter released Wednesday, the NDP accused the Liberals of failing to be transparent with Canadians about their fiscal plans, including “how large your deficits will be in each of the next three years.”
“Many more questions remain unanswered,” reads the letter signed by Andrew Thomson — a former Saskatchewan finance minister running in Toronto — and incumbent candidates, Peggy Nash and Guy Caron. “You owe it to Canadians to answer them.”
Trudeau has accused Mulcair of writing cheques he won’t be able to cash keep because of the NDP leader’s pledge to balance the budget right away. The Liberal leader has taken to telling Mulcair in stump speeches that he “can’t be Tommy Douglas on a Stephen Harper budget.”
The Grits have taken a different tack, saying they will run deficits of no more than $10 billion a year until 2019 in order to nearly double current spending on infrastructure and pay for promises which they believe with spur economic growth.
The OECD lowered its estimate for Canada’s economic growth to 1.1 per cent in 2015 on Wednesday. The U.S. economy, in contrast, is projected to grow by 2.4 per cent.
Finance Canada reported a surprise federal surplus this week of $1.9 billion in 2014-2015 fiscal year. The Conservative government and originally projected a $2 billion deficit.
Conservative Leader Stephen Harper boasted on the campaign trail that the first quarter of 2015-2016 recorded a $5-billion surplus, meaning that Canada might likely have two surplus budgets before Trudeau suggests plunging the country back into deficit.
Trudeau says Liberals have been clear
The Liberal leader told reporters Wednesday morning that he’s already released a “detailed framework” and this his party was the first to tell Canadians how they planned to pay for their promises.
“For example, our decision to lower taxes by $3 billion for the middle class will be paid for by raising taxes by $3 billion on the wealthy one per cent of Canadians,” Trudeau said.
“Every single commitment we’ve made, and every single commitment we will continue to make in the coming weeks will fit into that clearly established fiscal framework and be fully, and specifically costed, within the announcement we make,” he added.
The Liberals pointed to backgrounders on their website that outlined their plan to run three deficits, as well as detail their spending announcements. But most of their backgrounders don’t reveal precisely where a Liberal government would find the money. The details regarding changes in employment insurance premiums for example, don’t reveal how much revenue the Liberals are counting on since they are actually raising rates from what the Tories have promised.
The backgrounder on the Liberals’ plan for the middle class, however, does have specific details about tax cuts and tax increases on the wealthy. It states that Trudeau’s more generous child benefit would cost $4 billion annually, $2 billion of which would be offset by the Liberals’ scrapping the Conservatives’ income splitting plan. “The remaining $2 billion cost represents a fiscal commitment that is part of the Liberal election platform,” the document states.
Conservative incumbent candidate Jason Kenney said Trudeau’s growth plan was a fashionable Keynesian idea in the 1960s when economies were growing every year by five per cent. “That is not the new normal. The new normal is more modest growth, international instability and that requires great discipline and that’s really the point of our whole campaign,” Kenney said.
The Liberals counter that now, when you have anemic growth, is precisely the time to invest in the economy.
New Democrats unveiled their costing plan Wednesday afternoon in hopes of putting to rest allegations that they cannot fulfill their spending commitments and balance the books.